Sweden’s Krona is in its fourth consecutive day of recovery against the Pound (GBP/SEK) ahead of next week Riksbank’s rate decision. At the interbank market, on Thursday the GBP/SEK exchange rate settled down -0.14% at 12.4428, but the pair was seen quoted within a trading range of 12.4805 and 12.4209.
In Sweden, currency traders are bracing for the key Riksbank’s interest rate decision. Sweden’s central bank was not only one of the first major central banks to adopt negative interest rate policy but was also the first one to ditch negative rates. At its last meeting in December, the Riksbank of Sweden raised its benchmark interest rate by a quarter-point to 0.0%.
However, at the beginning of the year, a report from the Sweden government revealed that the key policy rate is expected to return to negative by 2021. According to the market consensus, Riksbank is expected to keep rates unchanged at 0.0% and to maintain an accommodative monetary policy stance in February.
Looking forward on the data front, the Swedish economic calendar will bring the household consumption figures scheduled to be released at 8:30 AM UTC. Household consumption increased by 0.0% in November, the lowest reading since May 2019. According to the general consensus, household consumption is forecast to increase by 0.3% in December.
Elsewhere, European Central Bank President Christine Lagarde said on Thursday that the ECB is running out of ammunition to fight global threats.
“This low interest rate and low inflation environment has significantly reduced the scope for the ECB and other central banks worldwide to ease monetary policy in the face of an economic downturn,” said the ECB President on Thursday
On the technical front, the GBP to SEK pair hangs around near the weekly lows. Following the three consecutive days of losses the GBP/SEK exchange rate has started to stabilize as traders are waiting for fresh cues from the Riksbank.
GBP/SEK was up 0.17% to 12.4635 in the late Asian session on Friday.
