The Pound jumped against the Swedish Krona on Thursday. The Pound versus Swedish Krona exchange rate closed the previous session 0.4% higher at 12.2520 as risk sentiment underpinned the pound in a very volatile session for global financial markets.
The Pound is slipping lower versus the Krona in early trade on Friday, as Brexit pessimism adds to the UK worries, whilst broader risk appetite improves
At 07:22 UTC, GBP/SEK is trading -1% at 12.1167.
Swedish Krona Rebounds
The Riksbank’s lack of desire to cut interest rates has been well documented recently. After hiking rates just a few months ago five years of negative interest rates, the central bank believes that it is too soon to consider putting rates back into negative territory.
However, Thursday’s inflation report could see the Riksbank having second thoughts. Swedish inflation failed to impress, falling to 1% year on year in February. This is down from 1.3% in January.
Data wise, investors will now look towards today’s unemployment figures. Analysts are expecting the unemployment rate to tick higher to 7.8% in February, up from, up from 7.5%.
Falling inflation and rising unemployment, combined with the fact that Sweden is an open economy and therefore at risk from impact of coronavirus, means that the Riksbank could be forced to consider cutting rates sooner than it would like to.
Pound Slips On Brexit & Coronavirus Fears
The Pound is proving to be very sensitive to risk sentiment in recent sessions. For example, on Thursday the Pound moved lower versus perceived safer haven currencies like the Euro, US Dollar and the Yen. However, it moved higher versus perceived riskier currencies such as the Australian Dollar and the Krona. This inflation suggests that sentiment is driving the pound amid coronavirus fears.
Yesterday evening Prime Minister Boris Johnson addressed the nation. He advised that the UK has moved into the second stage of the response plan, the delay phase. However, the Prime Minister is under fire for not taking more draconian action.
Brexit talks next week have been delayed, adding to the pound’s woes. Chief EU negotiator couldn’t resist passing comment saying that very serios divergences exist between the two sides. Any delay in talks will pressurise an already very tight timeline.
