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- 1 Pound sterling equals 12.46 Swedish Krona (7.30AM BST)
- Germany, Europe’s largest economy grew by 0.1 in Q3 2019
- Eurozone continues to show positive growth rate. EU statistic Eurostat showed a 0.2% growth rate in Q3
- Sweden’s unemployment rate dropped to 6.0% better than the expected 6.7%
Sweden’s Krona experienced a relief rally as currency traders took profits after five consecutive days of constant losses. On the interbank market, Krona closed on a positive note against the British Pound for the first time since the previous week. The GBP/SEK exchange rate closed down on Thursday, settling at 12.4720 or -0.27%, and during the early Asia trading hours, the GBP/SEK rate was seen quoted lower at 12.4453
The profit taking was motivated partially by the economic growth activity in the EU zone. Germany, Europe’s largest economy grew by 0.1 in the third quarter of 2019 disregarding the market consensus which saw Germany entering into a technical recession. Most Wall Street analysts forecasted a -0.1% contraction in Germany’s GDP.
The annualized GDP rate came in better than expected at 1.0% versus 0.9% forecasted number. The German Economy Minister Peter Altmaier downplayed the GDP growth rate saying that despite Germany has avoided recession the economy is still weak.
The Swedish economy relies heavily on foreign trade, especially with the partners in the EU zone. Any growth in the EU GDP rate is perceived as a positive sign for the Swedish economy.
The economy of the Eurozone continues to show positive growth rate. Data from the EU statistic Eurostat showed a 0.2% growth rate in the third quarter, which was in line with the market consensus. The year-on-year growth increased by 1.2%, which was up one tick from the 1.2% previous reading.
The other macro catalyst that leads investors to take profits was the Sweden’s unemployment report, which came better than the market consensus. The unemployment rate dropped to 6.0% better than the expected 6.7% and 7.1% prior reading.
GBP/SEK Technical Pattern
On the technical front, the GBP/SEK continues to trade above the key 200-day moving average, which delimits the bullish trend from the bearish trend. An eye could be kept on the 2019 high established at 12.6149 on 16 October, which is still not out of sight for a possible break later on.
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