The Swedish Krona gained ground versus the Pound on Wednesday.
The GBP/SEK exchange rate closed the previous session 0.5% at 12.2227.
Today the Swedish Krona is edging lower as risk sentiment dominates trading.
Pound Rebounds After Rate Cut
The Pound advanced versus the Swedish Krona but traded broadly lower versus its major peers after investors digested a deep 50 basis point interest rate cut from the Bank of England and £30 billion emergency stimulus package from the Government to tackle coronavirus. This was a coordinated response to the coronavirus threat set to hit the economy over coming weeks and months.
The coordinated move by the BoE Governor Mark Carney and Chancellor of Exchequer, Rishi Sunak, come as the number of coronavirus cases in the UK increase to over 500 and the death toll hits 8. Boris Johnson will hold a Cobra meeting today to move the UK into the second phase of the coronavirus policy. This is the delay phase.
Amid the coronavirus situation, Brexit fears are also rising. Post Brexit trade talks has been postponed until next week. However, if the spread of coronavirus worsens, which is looking very likely, then the talks could be pushed back further. Trade talks are already on a very tight timeline. Talk of a delay is unnerving Pound investors.
Swedish Krona Looks To Inflation Data
The Swedish Krona found support from the Riksbank in the previous session. Policymakers in Sweden’s central bank are wary about returning interest rates to negative territory so soon after raising the rate.
The Swedish economy is an open economy, meaning that it will take a hit from coronavirus. However, the Swedish Central Bank is making it clear that they see little sense in copying the Federal Reserve, Bank of Canada, Reserve Bank of Australia and the Bank of England by cutting interest rates to fight the fallout of the coronavirus. The bank said that it did not see lowering interest rates as the most important measure. These comments helped boost the Swedish Krona in the previous session.
Today investors will look towards the release of inflation data. Analysts are expecting inflation to increase 0.6% year on year in February. This would be up from a -1.4% decline in December.
