GBP/SEK: Krona Consolidates its Strong Gains to Multi-Week High

Sweden’s Krona remains supported on the global foreign exchange market and continues to consolidate its recent strong gains to multi-week high. However, on Thursday, after the Christmas break, currency traders saw the GBP/SEK exchange rate briefly higher on some profit taking. The Thursday trading session saw the GBP/SEK quoted within a trading range of 12.1933 — 12.2551.

During the past week, the currency market was engulfed by lower trading volumes due to the holiday season, thus the market experienced fewer swings in the price. In this regard, the bigger market themes like lackluster economic growth, Brexit transition period and worries over Sweden’s economic health will continue to weigh in on the SEK.

On Thursday, the Scandinavian currency settled at 12.2384 against the British Pound, registering a modest loss of -0.27%. However, during the late Asia trading hours the GBP/SEK exchange rate was kept within a trading range of 12.2434 — 12.1980.

Elsewhere, from the other side of the monetary policy spectrum the Bank of England BOE may be forced to cut interest rates to spur growth. The UK economy experienced anemic growth through 2019. In the third quarter, it only grew by 0.4% and according to the central bank forecast the UK economy is expected to grow by 1.0% in 2019 Q4 and by 1.6% in 2020.

Britain is the world’s sixth largest economy and by 2034 is expected to become the fourth largest economy in the world.

Against the US dollar, the Swedish Krona is trading at 5-months high while against the EU counterpart is trading at 8-months high.

GBP/SEK Technical Pattern

On the technical front, the GBP/SEK price pattern is consolidating its losses after it broke below a ranging market that kept the exchange rate trapped inside since the middle of October. The GBP/SEK pair also trades near the 0.382 Fibonacci retracement long-term level, which for now is acting as support. In the short-term the GBP/SEK pair remains confined to a tight intraday trading range amid thinned liquidity.


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