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Sweden’s Krona slides against the Pound on Brexit deal optimism. The SEK had a disappointing start of the week as the market sentiment continues to deteriorate. On the interbank market, Krona settled at 12.4840 up 0.25% on Monday, but not before reaching a high of 12.3326. During the early Asia trading hours, the GBP/SEK exchange rate was seen quoted slightly higher at 12.5000.
There are no major domestic catalysts on the economic calendar for Krona. Most likely the market drivers will come from external sources like the PMI figures scheduled on the economic calendar from both sides of the Atlantic.
Looking ahead over the European economic calendar, there’s a series of manufacturing data forecasted to paint a positive picture of the EU manufacturing sector. If the market doesn’t surprise to the downside, it will confirm that the strength in the manufacturing sector is durable.
The Swedish economy is highly dependent upon international exports, especially towards the EU. More than half of Swedish exports are directed towards the EU. The Krona exchange rate can benefit from any signs of expansion in the EU manufacturing sector.
The weakness seen in the Krona exchange rate was mostly motivated by the British Pound strength. It rallied 0.48% against the greenback. The UK Prime Minister Boris Johnson issued a statement that all 635 Conservative Party candidates standing in the UK general election are backing up his Brexit divorce deal.
The probability of Johnson’s Brexit deal finding support in the new UK parliament has increased considerably. The market investors are shrugging off the concerns over a no-deal Brexit scenario. The improved sentiment has the potential to provide additional support for the Pound which will harm the Krona.
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