GBP/SEK: Pound Snaps 5 Day Winning Streak On Turnaround Tuesday

The Pound is slipping lower versus the Swedish Krona in early trade on Tuesday, pausing for breath after five straight sessions of gains. On Monday the Pound versus Swedish Krona exchange rate ended the session 0.8% higher at 12.3922 as a calm attitude from the Bank of England continued to prop up the currency.

Today, at 07:15 UTC, GBP/SEK is trading 0.3% lower at 12.3595 as risk sentiment improves boosting the Krona and investors look ahead to the UK Chancellor’s Budget to gauge what fiscal stimulus is on offer.

Swedish Growth Outlook Holds Despite EZ Coronavirus Spread

The Swedish Krona is finding support on Tuesday after the finance minister Magdalena Anderson said that money is available for Swedish authorities to combat the coronavirus outbreak. She also confirmed that last week’s growth forecasts, where annual growth was lowered by 0.3% to 0.8% still stood despite the turmoil in the financial markets and the measure taken in Italy in recent days.

That said the Swedish Krona could remain under pressure as its biggest trading partner, for both imports and exports, Germany is expected to see a severe hit to the economy from coronavirus. Eurozone investor sentiment plunged in March to a 7 year low amid concerns about the impact of coronavirus on the economy.

There is no Swedish economic data due today. Investors will look ahead to tomorrow’s producer price index, which measures inflation at wholesale level.

Pound Looks To Budget For Clues

The pound is pausing for breath after a solid rally higher versus the Swedish Krona over the past five sessions. The calm stance from the Bank of England, which has shown no wish to rush into cutting interest rates amid the coronavirus outbreak has supported sterling.

After the UK stock market tanked 7.7% in its worst day of losses since the financial crisis investors need reassuring. Attention will now turn to the Chancellor of the Exchequer Rishi Sunak’s Budget on Wednesday. The stock market will be looking for strong fiscal spending to prop up the economy. Sufficient support from the UK government in the form of fiscal spending could push the pound higher.

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