GBP/SEK: Krona Rallies against Pound amid Dovish BoE

Swedish Krona has continued to strengthen on the currency market against the British Pound amid dovish BoE interest rate decision. Krona saw gains against the Pound for a second consecutive day, reaching a one month high.

The GBP/SEK exchange rate closed down on Thursday, settling at 12.3444, but not before seeing a week low at 12.2559. Before the London opening session, the GBP/SEK rate was seen quoted almost unchanged near yesterday close.

The main catalyst behind the surge in Krona rate was mostly due to the Pound weakness. It sold off post-BoE (Bank of England) interest rate announcement. As per the market consensus, BoE kept its interest policy unchanged, keeping the UK’s benchmark interest rate at 0.75%.

The dovish BoE surprise came from the Monetary Policy Committee (MPC) split vote on interest rates. Out of the nine MPCs members, two BOE’s policymembers Jonathan Haskel and Michael Saunders, voted for a rate cut. The 7-2 vote has motivated fresh Pound selling pressure. The market is now seeing an 80% probability of a BOE interest rate cut next year.

BOE Governor Mark Carney cited the slowdown in global growth and Brexit headwinds as a reason to keep interest rate unchanged. It is also reckless to adjust the interest rates ahead of a snap election that can reshape the UK political landscape and the Brexit outcome.

“These are pretty big tectonic forces operating right now…  If global growth fails to stabilize or if Brexit uncertainties remain entrenched, monetary policy may need to reinforce the expected recovery in UK GDP growth,” said the BOE Governor Mark Carney during the BOE press conference.

Additionally, BoE slashed its growth forecast and it expects the UK GDP to be 1% lower by the end of 2022.

Currencylive.com is a news site only and not a currency trading platform.

Currencylive.com is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on currencylive.com do not represent our views.