Swedish Krona fell against the British Pound near the lowest level in 4 years. At the interbank market, during the previous trading week, the GBP/SEK exchange rate settled up 1.03% at 12.5125, but the pair was seen quoted within a trading range of 12.3339 and 12.5571.
In Sweden, during the course of the last week trading session, several negative economic data weighed on the SEK rate. The economic growth outlook was lowered by the Nordic financial services group SEB to 1.1% in 2020. At the same time, inflation expectation remains subdued, which will keep the Riksbank’s refraining from changing its interest rate policy. The improved sentiment around the Pound has forced GBP to SEK rate to strengthen.
Looking forward over the Sweden economic calendar, we have some market-moving risk events that can disrupt the market volatility. Sweden’s producer price inflation PPI reading and the Retail Sales figures are scheduled to be released on Tuesday, January 28.
According to the general market consensus, the producer price inflation is expected to rise 1.5% year-on-year in December, following a 1.2% increase in November. On a monthly basis, the PPI figures rose by 0.3% in November.
At the same time, the year-on-year percentage growth in retail sales in Sweden is projected to decrease by 1.0% in December compared to 1.3% previous reading. This is likely to be the lowest reading since May 2019, when Swedish retail sale disappointed with a -0.35% MoM decline.
From the other side of the monetary policy spectrum, currency traders are eyeing the BoE interest rate decision. There are growing speculations that the BoE will cut interest rates by 0.25 basis points to 0.5% from 0.75%. At the previous BoE policy meeting, two out of 8 policy members voted for lowering the borrowing costs.
From a technical perspective, the GBP/SEK exchange rate is looking for a catalyst to break above the 2019 high established on 13 December at 12.6263.
GBP/SEK was up 0.05% to 12.5191 in the late Asian session on Monday.