Sweden’s Krona staged a two day rally at the end of last week and managed to recover some of its early losses. At the interbank market, during the previous trading week, the GBP/SEK exchange rate settled higher at 12.2928, but was seen quoted within a trading range of 12.4276 and 12.1869.
The Scandinavian currency appreciated by 5% during the last trading month of 2019, a move that was motivated by the Sweden central bank which got rid of its negative interest rate policy. During the early Asia trading hours, the GBP/SEK exchange rate was seen stabilizing and trading slightly higher12.3373 levels.
In Sweden, currency traders should focus on key economic data coming from the EU manufacturing sector as well as the US NFP report, which is the highlight risk event. However, the Monetary Policy Meeting Minutes are scheduled to be released on 8 January and should overshadow other risk events. The Riksbank’s minutes should reveal more clues on what the oldest central bank in the world thinks about Sweden’s economy.
In the UK, the newly elected government will return to work after the Christmas holiday break and will resume the debate around the PM Boris Johnson’s Brexit bill. The UK is scheduled to leave the 28-nation bloc on January 31. The Conservative Party has a comfortable majority to pass Johnson’s bill before heading to the House of Lords on January 9.
The Riksbank minutes should reveal more insight into the real reasons behind the rate hike. The current state of Sweden economic development doesn’t justify a rate hike. And, the minutes should reveal what the policy members think about the policy rate path moving forward.
Sweden’s Krona also remains sensitive to geopolitical risks and the Middle East tensions should weigh on the domestic currency.
