Sweden’s Krona fell to fresh four week low against the British Pound as the Scandinavian government sees negative interest rates in 2021 – 2022. At the interbank market, during the previous trading week, the GBP/SEK exchange rate settled down -0.02% at 12.3870 and was seen quoted within a trading range of 12.2629 and 12.4540.
The SEK has slumped against the Pound as the broader sentiment turned negative. In Sweden, the Finance Ministry cast doubts over the central bank move to leave interest rate behind. According to some government economic forecasts, Sweden is expected to introduce the negative interest rate policy in both 2021 and 2020.
The report came less than a month after the central bank ended NIRP to give them more flexibility in case the economy hits a downturn.
Looking forward over the economic calendar in Sweden the unemployment rate is scheduled to be released on January 23. Currently, Sweden’s unemployment rate stands at 6.8% and according to the market forecast, it’s expected to inch lower by one tick to 6.7%. Sweden’s government also revised upwards its unemployment forecast. The unemployment rate in Sweden is expected to inch to 6.4% through 2020 and 2021 respectively 6.5% in 2022.
In other news, next week the House of Lords in the UK will vote on the PM Boris Johnson’s divorce bill. Once the bill is passed into law, it will clear the path for the UK to leave the 28-nation bloc at the end of the month on January 31.
Elsewhere, risk events like the manufacturing PMI data from the UK and the ECB interest rate decision can disrupt the SEK volatility.
On the technical front, the GBP/SEK failed to capitalize on its drop to around the 12.2650 low and rallied to the higher end of its daily trading range, around the 12.4256. The GBP to SEK rate is expected to remain trapped inside its daily range until the pair can manage to gain some traction.
GBP/SEK was down -0.24% to 12.3553 in late Asian session on Monday.
