Swedish Krona was left wounded against the British Pound and touched its lowest level in 2020. At the foreign exchange market, the GBP/SEK exchange rate settled up 0.17% at 12.5137, but the pair was seen quoted on Thursday within a trading range of 12.4659 and 12.5299.
The negative impact of the unemployment and inflation rise in Sweden has weighted on the Scandinavian currency. The low inflation in Sweden constitutes a serious threat to the SEK because the Riksbank has ditched negative interest rates without meeting its 2% inflation target.
According to the Kantar Sifo Prospera survey, the 5-year inflation expectation is expected to rise marginally to 1.9% versus 1.8% prior reading. At the same time, the 12-month inflation expectation is presumed to slip lower to 1.3% compared to 1.6% earlier reading.
The Riksbank’s favorite measurement of inflation CPIF is anticipated to remain stable at 1.6% for the next 12-months and 1.8% in the five year term.
Meanwhile, the unemployment rate in Sweden surprised to the upside with a correction after it fell to 6.0% in December compared to 6.8% prior reading. The market consensus was for a small improvement in the rate of inflation of only 6.7%.
The employment data revealed that 32,000 new jobs were created in December, while the unemployed people increased by 1,000.
In other news, the UK lawmakers passed into law PM Boris Johnson’s divorce bill paving the way for a smooth departure from the 28-nations bloc. On Thursday, Boris Johnson’s Brexit deal was signed off by the Queen. The UK will be leaving the EU next week on 31 January.
From a technical perspective, the GBP to SEK pair followed through after it broke above its 3-week range. The next big hurdle for the GBP/SEK pair is the 2019 high established on 13 December at 12.6263 where we can find some kind of resistance.
GBP/SEK was up 0.07% to 12.5230 in the late Asian session on Friday.
