Swedish Krona dives on the interbank market on the back of Pound strength and touched a two week high at 12.5183. The Krona has done poorly this year alone losing more than 10% of its value against the British Pound.
The GBP/SEK exchange rate closed up the first trading day of the week, settling at 12.4626. During the early Asia trading hours the GBP/SEK rate was seen quoted unchanged near yesterday close.
The GBP/SEK strength was motivated by pound strength and not so much by the Krona weakness. The Pound has gained strength after Brexit Party Leader Farage suggested that they will not contest Tory seats that they won during the 2017 election. This is a 180 degree U-turn in Farage’s rhetoric which committed his Brexit party to contest all 600 seats in parliament.
The Pound rallied in relief in light of these comments as the probabilities that the Conservative Party can gain a majority in the UK parliament have raised and subsequently get Prime Minister Boris Johnsons’ Brexit deal through parliament.
In other news, on the UK economic calendar we have scheduled some risk events that can disrupt the market volatility. According to the general consensus the UK unemployment rate is expected to come flat at 3.9%. The UK unemployment rate suffered the worst slump in four years alongside wage growth, which stalled due to Brexit uncertainties.
Moving forward, the UK general election will continue to be the main source of volatility for all Pound crosses. The future of the Prime Minister Boris Johnson’s Brexit deal is at stake.
GBP/SEK Technical Pattern
On the technical level, the GBP/SEK exchange rate is trying again to challenge the 2019 high established at 12.6149, but has fallen short. The intraday resistance level found at 12.5065 has found some sellers that so far managed to stop the aggressive GBP/SEK spike. On the downside, an eye could be kept on the support level 12.3240.
The big picture trend remains stacked against the Krona, which doesn’t have much hope going into the year end.