SEK saw some follow-through against GBP following the biggest daily gains since August 2019. At the interbank market, on Tuesday the GBP/SEK exchange rate settled down -0.39% at 12.4922, but the pair was seen quoted within a trading range of 12.5491 and 12.4781.
In Sweden, the upbeat Manufacturing PMI figures continued to provide a catalyst for currency traders to bid the SEK higher against the Sterling. However, the Scandinavian currency will continue to remain on the edge as a new stream of economic data is scheduled to be released at 8:30 AM UTC.
The Sweden Services PMI data as compiled by the Swedbank is expected to rebound to 49.5 in January compared to 48.7 readings in December. If the data is confirmed, this will be the fifth straight month of contraction in the services sector. Following the better than expected data from the manufacturing sector, which expanded for the first time in 5 months, the service sector can rebound too.
Meanwhile, Sweden’s industrial production is expected to slow down to -0.8% in December versus 2.1% growth in November. On a year-on-year basis, the industrial production is expected to grow by 1.1% compared to 0.8% previous reading. At the same time, industrial orders are expected to increase by 0.7% following a decline of -1.2%.
Elsewhere, UK Prime Minister Boris Johnson and the EU’s chief Brexit negotiator Michel Barnier clashed over the possible new trade deal terms. The UK has now 11-month transition period to strike a trade deal with its EU counterparts. On the currency market, the British Pound is trying to regain its strength in post-Brexit trade.
Looking over the technical pattern, the GBP to SEK pair has erased last week loss and may consolidate following the two-day sell-off. The impulsive decline may offer some hope for the SEK bulls, but as long as we trade above the yearly opening price the Krona remains at risk.
GBP/SEK was down -0.01% to 12.4900 in the late Asian session on Wednesday.
