Swedish Krona got a bit of boost against the British Pound after the Riksbank pointed to rate hike. Sweden central bank, reiterated its intentions to hike interest rate later this year in December. Riksbank tipped off that its interest rate forecast is up in the air due to macro factors like Brexit and the US — China trade war.
The GBP/SEK exchange rate has fallen to a low of 12.320 during yesterday’s trading session, but it closed the day at 12.4000 and it’s currently quoted around 12.4120.
Sweden central bank has left the country’s key benchmark interest rate unchanged at -0.25%. The Riksbank has maintained its negative interest rate policy since 2015, when it was lowered for the first time in history below zero.
“However, the development of economic activity and inflation abroad and in Sweden in the coming years is very uncertain, and it is therefore difficult to say, at present, when it will be appropriate to raise the repo rate next time,” said the Riksbank in its monetary policy statement.
The interest rate in Sweden has remained unaltered since December 2018, when Riksbank raised it from an historic low of -0.50% down to -0.25%. The rate hike was in line with the inflation trajectory which was close to the targeted 2%.
From the other side of the monetary policy spectrum, there have not been made any new progress towards an orderly Brexit departure. With only six days more to go until the official departure date October 31, is left with only two options: to continue pushing his divorce bill or to call an early general elections.
GBP/SEK Technical Pattern
From a technical point of view the GBP/SEK exchange rate remains trapped in an overextended and nervous trading range. The inability to close below the key support level found at the 12.3292 level suggests that the risk of having another attempt to break to a new 2019 high is still viable. Traders should keep an eye on the key intraday resistance level 12.5350 for early signs of another break higher.
