GBP/SEK: Krona Crashes to New 2019 Low on UK Election Results

Swedish Krona crashes to a new 2019 low as the UK exit polls revealed the Conservative Party is set to win a comfortable majority in the UK parliament. During yesterday’s trading session, the GBP/SEK exchange rate settled at 12.3707, but surged sharply after the New York close and once the UK election results hit the market hitting a high of 12.6263.

Thursday’s trading session saw the GBP/SEK within the range of 12.2868 -12.4166. However, during the early Asia trading hours, the GBP/SEK exchange rate was seen trading near the 2019 highs as currency traders remain euphoric about the UK election results.

In Sweden, the unemployment rate rose above the market consensus and came in at 7.3% in November showing signs of weakness in the labour market. On the other hand, the employment rate inched higher by 0.1%, respectively 0.9% annualized rate, while the labour supply rose by 0.8%. While the Swedish Labour Force Survey data missed the market expectation the labour figures aren’t that bad as to motivate Riksbank not to pursue a rate hike next week.

In Europe, the new ECB President Christine Lagarde followed the lead of the US Federal Reserve and paused ECB’s easing efforts. In her debut, the European Central Bank chief noticed that the Eurozone’s economic slowdown is fading away.

Against the US dollar, the British Pound skyrocketed to a 2.5 year high as the UK election tips to biggest Conservative win since 1987. The Conservative victory in the UK election will allow Prime Minister Boris Johnson to deliver Brexit before the next deadline set on 31 January 2020.

The Tory Party is set to win 368 seats in the UK parliament, which will give them a comfortable majority of 86 seats,  which is above all the previous estimations including the 28 seat majority forecasted by the YouGov poll. Compared to the 2017 election, the Conservatives have gained an extra 50 seats.

GBP/SEK Technical Pattern

The GBP/SEK technical pattern has penetrated the 2019 high established at 12.6149 on 16 October. The daily break above 12.6149 has reinforced the bullish trend which has the potential to develop into 2020.

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