GBP/SEK: Swedish Krona Under Pressure As Outlook Dims

Sweden’s gloomy outlook is denting demand for the Swedish Krona. The Swedish Krona closed Thursday’s session 0.2% lower versus the Pound sterling and is extending losses for a third straight session on Friday. After having briefly touched a 5-month high earlier in the week of 12.02, the Swedish Krona continues pare gains.

At 06:45 UTC GBP/SEK is 0.2% higher at 12.2497 as coronavirus remains in focus.

Pound Underpinned By BoE

Comment by the next Bank of England Governor Andrew Bailey have helped soften BoE rate cut expectations. Mr Bailey said on Thursday that he would be keen to see what the Chancellor has to offer in his Budget on 11^th March before any decisions on cutting rates are taken. He has also mentioned that he is keen to see additional data before any decisions are taken.

From these comments the market is assuming that there will be no between meeting cut, like the Federal Reserve. Nothing is like to happen until 26^th March. This calm attitude has lifted the pound.

Coronavirus will remain very much in focus after the UK reported its first death from the virus and as the number of cases increase. Boris Johnson met with the Chancellor and current Bank of England Governor Mark Carney to plan the government’s initial response to the coronavirus outbreak.

Swedish Krona Drops As Outlook Clouds

Whilst expectation of a rate cut by the BoE are easing, the same cannot be said for the Riksbank. Expectations of a rate cut by the Swedish Central bank are on the up, just weeks after the Riksbank raised rates back into positive territory for the first time in 5 years.

Sweden industrial production figures were at 1.5% month on month in January, stronger than what analysts had anticipated and significantly higher than the -1.2% decline in December.  However, the Swedish government lowered its production outlook and the situation is only likely to deteriorate with the effects of coronavirus, potentially opening the door to a rate cut.

There is no more high impacting data Swedish data this week. Investors will continue to monitor the coronavirus outbreak and governments’ responses.

Currencylive.com is a news site only and not a currency trading platform.

Currencylive.com is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on currencylive.com do not represent our views.