GBP/SEK: Krona Relief Rally against the Pound amid Upbeat PMI

Sweden’s Krona staged a relief rally against the Pound sterling amid upbeat Manufacturing PMI data in Sweden. At the interbank market, the GBP/SEK exchange rate settled down -1.27% at 12.5406, but the pair was seen quoted within a trading range of 12.7016 and 12.5263.

The Scandinavian currency started the first trading day of the week on a positive tone and managed to rebound following a drop to a new 4 year low against the British Pound. On the data front, the PMI manufacturing index in Sweden as compiled by the Swedbank came in better than expected and increased to 51.5 in January compared to an upwardly revised from 47.1 to 47.7 in December 2019.

A reading above the 50 mark shows expansion in the manufacturing activity. In Sweden, this was the first reading above the 50 mark since August 2019. The SEK cheered the positive data and rallied aggressively interrupting multi-day losses.

Meanwhile, in the UK, the IHS Markit/CIPS purchasing managers’ index (PMI) rose to neutral levels of 50.0 in January compared to 49.8 previous reading. According to the survey, Britain’s manufacturing sector rebounded from its worst downturn in recent year. The Brexit uncertainty dragged down the UK factory output, but following the Conservative Party landslide victory in the general elections the new orders have started to see a soft recovery.

Elsewhere, Prime Minister Boris Johnson in a speech on Monday paved the way for trade deal agreement with the EU counterparts.

“There is no need for a free trade agreement to involve accepting EU rules on competition policy, subsidies, social protection, the environment or anything similar, any more than the EU should be obliged to accept UK rules,” PM Johnson said – citing Reuters.

Looking over the technical pattern, the GBP to SEK pair is declining from a multi-year high. The strong bullish momentum couldn’t sustain its pace and faded away. On the downside, the key support level remains the yearly opening price which stands at 12.4256

GBP/SEK was down -0.16% to 12.5199 in the late Asian session on Tuesday.

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