Sweden’s Krona ended the last week of trading on a positive note against the Pound following the Riksbank’s rate hike and dovish BoE. During the previous week, the GBP/SEK exchange rate settled at 12.2335 registering a positive gain of 2.28%. Last week, currency traders saw the GBP/SEK quoted within a trading range of 12.5732 — 12.2101.
The post UK election weakness has been completely reversed as the risks associated with a hard Brexit have been considerably diminished. Investors took the chance and bid higher the Scandinavian currency, but the positive sentiment was also helped by Pound profit taking across the board.
Sweden’s central bank raised rates by 0.25 basis points from -0.25% to 0.0%, putting an end to a decade long negative interest rate policy. However, as we get closer to the New Year, Krona’s gains can be limited as the central bank mentioned the benchmark interest rate to be kept on hold up to 2021.
During the early Asia trading hours, the GBP/SEK exchange rate was seen stabilizing and trading around 12.2502 levels.
In Sweden, currency traders are facing a quiet week ahead being disturbed by the Christmas holiday season. With banks being closed on Christmas day and the low level of liquidity available in the markets will result in moderate currency exchange rate fluctuations.
In the UK, the newly elected legislature in the UK parliament has endorsed Boris Johnson’s divorce bill delivering a decisive step towards the Brexit. The UK parliament voted 358 to 234 in favor of the Brexit bill. The bill is expected to be passed into law early next year. This means that the UK will leave the 28-nation bloc at the scheduled deadline of 31 January.