Swedish Krona continues to feel the negative headwinds coming from the dovish Riksbank minutes ahead of key inflation reading. Krona lost some grounds against the Pound during the prior weekly session, but not before printing a one month high. The GBP/SEK exchange rate closed up last week, settling at 12.3886, and during the early hours of trading the GBP/SEK rate was seen quoted higher at 12.4312.
Let’s take a look at the factors that have been driving the pound US dollar exchange rate across the week.
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On other news, economist Anna Breman was appointed as the deputy governor of the Swedish central bank. The new deputy governor of Riksbank is not a fan of negative rates. She often cited the ultra-loose policy by the Riksbank as the catalyst for the weakness seen in the Swedish currency. Breman will take part in the Riksbank’s interest rated decision scheduled on 18 December.
The upcoming week will also bring an important piece of risk event. Sweden inflation reading ill hit the markets. The inflation reading is expected to remain below Swedish central bank target.
The wage cost pressures are lacking the stamina to motivate inflation rise to the 2% inflation target. Secondly, the data from the labour market activity is also painting a slowdown in inflation. The seasonal pattern also suggests that generally the month of October experiences only small price changes.
The UK general election will also set the mood for the currency market. The Conservative and Labour Party will fight for the future of the UK in the EU and the future of the Prime Minister Boris Johnson’s Brexit deal.
