The Swedish Krona fails to sustain its gains against a nervous British Pound ahead of key interest rate decision. The GBP/SEK exchange rate has fallen to a low of 12.3787 during yesterday’s trading session, but it has managed to recover and is currently quoted around 12.4520.
The Riksbank is scheduled to announce its monetary policy decision later today. Most economists on Wall Street expect that Sweden’s central bank to keep interest rates unchanged at -0.25%. More, the benchmark interest rate is expected to be kept on old through 2020 and beyond.
However, the main focus will be on the general tone and whether or not Riksbank will maintain their hawkish bias, which in the short-term can help the Swedish Krona to gain more traction. Stefan Ingves, Governor of the Sveriges Riksbank has hinted of a possible rate hike later this year or early next. But, the deterioration in the domestic activity implies that it will become increasingly harder to maintain a hawkish bias.
Macro factors like the US — China trade war, the slowdown in the European Union and Brexit have been adding extra pressure on the hawkish plan. But on the other hand the perpetual weakness that the Swedish Krona had seen since the beginning of the year can encourage Riksbank to maintain its hawkish bias, even if that means keeping rates on hold.
From the other side of the monetary policy spectrum the Brexit theme continues to keep the British Pound on its toes. Keeping track of the new developments relating to the Brexit process it makes harder to assess the trading bias for the British Pound. There are only 7 days more to go until the official departure date October 31.
It appears that even without the UK lawmakers’ support for his Brexit timetable, the UK Prime Minister Boris Johnson said that he will push for the UK to still leave the EU bloc at the end of October.
GBP/SEK Technical Pattern
The GBP/SEK exchange rate has been trapped over the past several days in a nervous trading range. The market still waits for a market driven catalysts to promote some trend development and escape the current consolidation zone.
