Swedish Krona rises to a 5-day high against the Pound following a better-than-expected reading on Sweden inflation. During yesterday’s trading session, the GBP/SEK exchange rate settled at 12.3908 registering a -0.62% loss. But not before touching an intraday low of 12.3820.
Tuesday’s trading session saw the GBP/SEK within the range of 12.4869 -12.3820l However, during the early Asia trading hours, the GBP/SEK exchange rate was seen stabilizing at 12.4653 level. Currency traders brace for the UK election day.
In Sweden, inflation rose marginally higher in November and consequently the Scandinavian currency appreciated on the interbank market. The annual pace of inflation came in line with Sweden’s central bank forecast at 1.7% versus 1.6%, market consensus. At the same time consumer prices rose 0.1% in November the data showed on Wednesday.
The inflation reading followed the Prospera inflation survey, which was published early this week. This showed the 5-year inflation and 12-month inflation at 1.8% respectively at 1.6%.
With inflation close to Riksbank’s 2% inflation target, the central bank is likely to carry on with its ambitions to hike rates at its policy meeting next week. This will also put an end to the negative interest rate policy that governed the central bank’s policy for the past five years.
Against the euro, Swedish Krona rallied to an 8-month high taking advantage of the bullish momentum built up in the past few weeks.
From the other side of the monetary policy spectrum, GBP traders are still digesting the latest YouGov poll which revealed Tory’s lead shrinking to 9 points against the Labour Party. The Election Day will keep the Pound cross on the edge as more volatility is expected once the UK election outcome will be known to the market.