Swedish Krona rose on the currency market against the Pound amid weak UK PMI figures. Last week, Krona experienced a relief rally leaving the pairing trading at a low of 12.3326, but settled slightly higher at 12.3627. During the early Asia trading hours, the GBP/SEK exchange rate was seen quoted lower at 12.3461.
Against the greenback, the British Pound fell -0.72% as investors sold off the currency pair following the discouraged UK manufacturing data for November. The UK services PMI dropped to almost 3.5 years low alongside with the Markit Manufacturing PMI, which fell to levels not seen since 2013.
According to most Wall Street analysts this is the longest streak of weakness seen in the UK manufacturing sector in a decade. The UK Markit Manufacturing PMI fell from 49.6 to 48.3while the services business activity dropped to 48.5 versus 50 prior readings. A reading below the 50 mark shows contraction and it’s perceived as bearish for the GBP crosses.
It seems that the headwinds generated by the UK general election uncertainty have spilled over into investor confidences which are reluctant to invest in the UK economy.
The UK Inflation Report Hearings is scheduled to be released by the Bank of England on Wednesday 27th. Inflation in the UK dropped to 1.5% in the previous month amid the falling prices in the energy sector. Inflation is well below the Bank of England 2% target and according to a BOE report it’s set to slide further to 1.25% in 2020.
From the other side of the monetary policy spectrum, Sweden’s GDP figures for the third quarter will be released on Friday. According to the market consensus the Q3 GDP should experience an uptick from 0.1% prior reading up to 0.2%. The annualized GDP rate is expected to show Sweden economy growing by 1.8% versus 1.0% prior reading.
GBP/SEK Technical Pattern
On the technical front, the GBP/SEK price pattern has made some progress on the downside and it’s on track to challenge the support level 12.2559.