Sweden’s Krona managed to conserve last’s week gains against the British Pound even on holiday-reduced trading liquidity. On the foreign exchange market, the Pound to SEK exchange rate settled almost unchanged and closed at 12.1930 near Monday’s closing rate.
During Tuesday’s trading session, currency traders saw GBP/SEK quoted within a tight trading range of 12.2313 — 12.1722.
The Scandinavian currency has recently broken to an 11-week high following the post-UK election results and fading Brexit worries have improved the overall sentiment. However, the SEK upside may also be capped after the “dovish” rate hike delivered by the Riksbank last week. The Sweden central bank has drawn a clear path for the benchmark interest rates, which are expected to be kept on hold through 2021.
In other news, the leading global investment bank, Goldman Sachs in its 2020 Forex currency outlook they are forecasting strong gains for the Swedish Krona, especially in the first quarter of 2020. At the same time, their top forecast favors a GBP breakout to the upside and expect the Brexit deal to push the Pound to dollar exchange rate to 1.3500 in three months and by 2020 end they forecast an exchange rate of 1.3700.
During the early Asia trading hours, the GBP/SEK exchange rate was seen stabilizing and trading around 12.1918 levels.
Elsewhere, in the UK, the fears of a hard Brexit continue to weight on the Pound crosses. The UK is scheduled to depart from the EU by the end of 31 January 2020. The downside pressure may also be magnified by thinner liquidity that has engulfed the forex market due to the holiday season.
