Swedish Krona erased post-election losses against the Pound amid news reports that reveals the UK government will seek to ban any extensions of the post-Brexit transition. On the currency market, during Tuesday’s trading session, the GBP/SEK exchange rate settled at 12.3081 registering a +1.02% gain.
Tuesday’s trading session saw the GBP/SEK within the range of 12.4603 -12.2777. However, during the early Asia trading hours, the GBP/SEK exchange rate was seen stabilizing higher and trading around 12.3370 level.
The British Pound tumbled more than 1% against the greenback as fears of a new “no deal” Brexit cliff edge have once again risen. The UK Prime Minister Boris Johnson will seek to put into legislation the new amendments to “legally prohibit” any extensions of the post-Brexit transition beyond December 2020.
The UK formally leaves the 28-nation bloc on 31 January 2020. If the new legislation finds support among UK lawmakers, it will give the UK less than 11 months to strike a trade deal with the EU, which will add more uncertainty to the markets. The Conservative Party won a comfortable majority of 80 seats in the recent elections, which will make Johnson’s agenda more easily to pass in the UK parliament.
In the UK, the labour market data revealed strong job growth as the unemployment rate fell to the lowest level in 44 years. According to the Office for National Statistics (ONS) the unemployment rate fell to 3.8%, while the employment rate inches to the highest reading ever registered 76.2%. Wedge growth slowed to 3.5% versus 3.6% previous reading.
Looking forward over the economic calendar, the UK will release its CPI inflation figures for November. The UK inflation has been falling since the Brexit debacle and according to the market consensus inflation should ease further.