Sweden’s Krona trades sharply higher against the British Pound, during the opening trading session of the new week. The move might be motivated by more profit taking from the post-election euphoric rally. On the interbank market, during Monday’s trading session, the GBP/SEK exchange rate settled at 12.4339, gaining +0.76%.
Monday’s trading session saw the GBP/SEK within the range of 12.5732 -12.4042. However, during the early Asia trading hours, the GBP/SEK exchange rate was seen stabilizing and trading around 12.4316 level.
The British Pound continued to fall as investors trimmed more of their bullish bets. Given that speculators are heavily long the Sterling, this may leave the pair at risk for more unwinding. Against the US dollar, the Pound has gained 3.02% year to date.
In the UK, the manufacturing activity slumps at the fastest rate in 7 years as business activity slowed down aggressively. The UK output as measured by the Manufacturing PMI data slipped to 47.4 in December, below the previous reading of 48.9 and lower than the market consensus of 49.3. Any reading below the 50 mark shows contraction.
At the same time UK Services PMI disappointed the market and came below the forecast figure of 49.5, and lower than the previous month reading of 49.3. The survey revealed that the political uncertainty from the past months coupled with Brexit fears and the global economic slowdown are the main culprits for the slump in business activity.
In Sweden, currency traders are waiting for the Riksbank interest rate decision scheduled on Thursday 19 December.
Looking forward over the economic calendar, the UK unemployment figures and the BOE’s Governor Carney speech are the main risk events that have the potential to disrupt the market volatility.