In 2020, the Pound to SEK exchange rate will be driven by the cliff-edge Brexit risks which continues to possess a source of uncertainty. In early trade, on the foreign exchange market, after the Christmas break, the GBP/SEK exchange rate was seen quoted within a range of 12.1933 and 12.2224.
The risks of a no trade deal between the UK and the counterparts in the EU have risen after the newly elected UK parliament backed Johnson’s divorce bill. The UK Prime Minister Boris Johnson has banned the UK government to make any extensions to the Brexit transition period beyond the end of 2020.
The UK will leave the 28-nation bloc on January 21 next year, but it will continue to be part of the European single market and customs union until December 31, 2020. If PM Johnson can’t strike a trade deal by December 31 next year, it will force Britain out of the EU customs union on World Trade Organization.
Pound crosses sentiment will continue to be impacted by the Brexit market theme throughout 2020.
Apart from the Brexit fears, currency traders also expect SEK gains to be limited next year. Sweden’s central bank exited negative interest rates, but this is not enough to motivate foreign investors to park their money in the Scandinavian currency. Sweden’s Krona couldn’t find support from the economic data either, as the Sweden economy has shown signs of ongoing weakness.
During the early Asia trading hours, the GBP/SEK exchange rate was seen stabilizing and trading higher around 12.2164 level.
GBP/SEK Technical Pattern
On the technical front, the GBP/SEK price pattern continues to trade above the key 200-day moving average, which is the line in the sand between the bullish trend and the bearish trend. In the short-term, the exchange rate continues to decline towards the big psychological number 12.000.