GBP/SEK: Heightened Geopolitical Tensions Take its Toll on SEK

Sweden’s Krona staged a rebound following improved Swedish Services PMI activity in December. However, at the interbank market, the GBP/SEK exchange rate settled up 0.23% at 12.4103, heightened geopolitical tensions take its toll on the risk-sensitive SEK.

The GBP to SEK pair seen quoted on Tuesday within a trading range of 12.4270 and 12.3498.

In Sweden, services sector purchasing managers as measured by the Swedbank’s Services PMI was better-than-expected and increased to a seasonally adjusted 48.7 in December compared to 48.0 readings in November. A reading below the 50 mark suggests contraction in the Sweden services purchasing managers’ index (PMI).

Looking forward over the economic calendar, currency traders are eyeing the Monetary Policy Meeting Minutes of the December meeting scheduled to be released at 10:30 UTC. At the December meeting the world’s oldest central bank ended an unconventional monetary policy and brought interest rate to zero.

Additionally, the Retail Sales figures will be published at the same time. According to the market consensus the year-on-year percentage growth in retail sales in Sweden are expected to inch higher to 3.4% versus 3.3% prior reading.

Elsewhere, the European commission president, Ursula von der Leyen voices concerns over the short time left to reach a trade deal with the UK counterparts by the end of 2020. The UK is set to become the first country to leave the 28-nations bloc on January 31. The UK and EU will have an 11-month transition period to strike a trade deal, but the European commission president expressed worries that it will be “extremely challenging” to reach a consensus

“We must ask ourselves seriously if all these negotiations are feasible in such a short time,” she added

From a technical perspective, the GBP to SEK pair gained some positive traction since the beginning of the week. The swift pace of increased bullish momentum has escalated the chances of closing above the previous week high. The GBP/SEK retreating from the December low is in line with the long-term bullish trend.

GBP/SEK was up 0.05% to 12.4162 in late Asian session on Wednesday.

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