Sweden’s Krona was quiet on the interbank market as currency traders await fresh cues from the BOE and Riksbank’s monetary policy decisions. On the currency market, during Wednesday’s trading session, the GBP/SEK exchange rate settled at 12.3290 almost unchanged from the previous closing price.
Wednesday’s trading session saw the GBP/SEK within a tight trading range of 12.3598 -12.2747. However, during the early Asia trading hours, the GBP/SEK exchange rate was seen stabilizing and trading around 12.3110 level.
Riksbank Governor Stefan Ingves has sent a strong message that despite growing economic risks, the Sweden’s central bank is ready to exit negative interest rate. Riksbank has kept the benchmark interest rate in negative territory since the subprime mortgage crisis, being the first major central bank in the world to adopt such extreme monetary policies.
The market consensus is for Riksbank to deliver a 25bp rate hike and then to stop its tightening efforts for the next years and continue to keep a dovish stance.
In the UK, the CPI inflation rate continues to hover steady at 1.5% and the core reading at 1.7%, the lowest figure seen in about 3.5 years. The Office for National Statistics (ONS) revealed that in November prices rose by 0.2% versus -0.2% previous reading.
Looking forward over the economic calendar, from the other side of the monetary policy spectrum, the BOE policy members will gather to decide the fate of UK’s benchmark interest rate. With inflation remaining below the Bank of England’s target of 2% and factors such as Brexit transition period; and external factors such as global growth; will continue to weigh on BOE’s ability to alter interest rates.
GBP/SEK Technical Pattern
On the technical front, the GBP/SEK price action continues to hover at the lower end of its long-term trading range. The foreign exchange market is in a state of wait-and-see mode ahead of two key interest rate decisions that have the potential to disrupt the market volatility.
