Swedish Krona on Tuesday experienced a relief rally against the British Pound as currency traders brace for the UK election day. During yesterday’s trading session, the GBP/SEK exchange rate settled at 12.4969 registering a +0.29% gain, but not before touching a high of 12.5712.
Tuesday’s trading session saw the GBP/SEK within the range of 12.5712 -12.5126.
However, during the early Asia trading hours, the GBP/SEK exchange rate was seen quoted further down at 12.4653 as a result of more profit-taking in the currency market
In Sweden, the two-year and five-year inflation expectation that covers the business groups in the Scandinavian land inched lower in December, the Prospera inflation survey showed on Tuesday. The 5-year inflation was seen at 1.8% versus 2% previous reading while the 12-months inflation was seen at 1.6%. The inflation expectation is a risk metric that Riksbank policy members keep an eye on for setting the appropriate interest rate policy.
While, two policy members Floden and Jansson expressed some uneasiness about the decline in the inflation expectation, Sweden’s central bank is expected to move forward with its efforts to put an end to negative interest rate policy NIRP.
In other news, in the UK, the Office for National Statistics (ONS) data revealed that the UK economic growth stagnated due to Brexit fears and UK elections fears. Other key data showed the service sector expanding by 0.2%, while the manufacturing production and construction contracted by 0.7% respectively 0.3%. Today’s FOMC interest rate decision is the main catalysts and a trendsetter for the currency market.
Elsewhere, YouGov’s MRP model published at 10 PM on Tuesday showed the Conservative lead shrinking to 9 points raising the probability of a hung parliament. The UK Prime Minister Boris Johnson is moving towards a minor majority of only 28 seats.