Swedish Krona stages a relief rally against the Pound ending 6 consecutive days of losses amid retail sales boost. At the interbank market, the GBP/SEK exchange rate settled down -0.43% at 12.5130, but the pair was seen quoted within a trading range of 12.5778 and 12.4904.
In Sweden, the strong retail sales figures for the last month of 2019 led a SEK relief rally, allowing the Scandinavian currency to regain its composure. Sweden’s retail sales expanded by 3.4% year-on-year in December compared to a 1.8% increase in November.
At the same time, according to data from the statistical office the upbeat producer price index rose by 1.3% year-on-year in December versus a 1.2% increase in November. Inflation showed its best reading in 6 months. The better-than-expected inflation figures helped the SEK rebound against the Pound. On the other hand, the monthly reading in December saw inflation contracting by -0.5% following a 0.3% increase in November.
Inflation in Sweden has been subdued and below the central bank’s 2% inflation target. When it comes to inflation, the PPI reading remains Riksbank’s favorite measurement of inflation.
A separate report revealed Sweden’s trade balance posting a surplus of SEK 0.3 billion in December compared to a surplus of SEK 2.7 billion in November. Imports increased at an annual rate of 5.2% in December compared to 4.1% previous reading. At the same time, export price increased at an annual rate of 2.0% in December following a decline of -1.2% in November.
From the other side of the monetary policy spectrum, currency traders are eyeing the Bank of England interest rate decision. According to the market expectations, there is a 60% probability of a rate cut.
From a technical perspective, the GBP/SEK exchange rate finally saw some build up in negative pressure. It is worth mentioning that the risks of an upside break are still alive since the pair continues to hang around 2019 high.
GBP/SEK was down -0.01% to 12.5113 in the late Asian session on Tuesday.
