Swedish Krona is slipping lower versus the Pound as trading begins at the start of the week. The move comes after the Pound lost 2.6% versus the Swedish Krona across the previous week following an emergency 0.5% interest rate cut by Bank of England and as investors were left disappointed by Boris Johnson’s measures.
At 07:00 UTC, GBP/SEK is trading +0.8% higher at 12.0246. The pair is advancing as investors digest the latest coronavirus developments and the levels of stimulus being pledged to help the global economy through a very difficult few months.
Riksbank Offers Support To Swedish Economy
The Swedish Krona traded on the front foot on Friday after the Riksbank, the Swedish central bank, announced that it would lend up to 500 billion Swedish Krona to Swedish companies to ensure that they have the necessary access to liquidity during the coronavirus pandemic.
The Swedish central bank confirmed that they believe that coronavirus would have a clear negative effect on economic activity. The Riksbanks underlined how important it is was for efficient credit supply to companies to be maintained.
The move from Sweden came following moves from the Fed, the Bank of Japan, the Reserve bank of Canada and the Norwegian central bank. The Riksbank also made it clear that they were prepared to ease monetary policy further if needed.
Pound Rises on Hopes Of More Draconian Measures
The Pound is advancing in early trade as Prime Minister Boris Johnson looks set to ramp up Britain’s response to Coronavirus after his more measured approach began losing public, political and medical support.
Last week, the Bank of England cut interest rates by 50-basis points in an emergency move, the Government pledged £30 billion in an emergency stimulus package for the economy and Boris Johnson increased the UK level response to coronavirus to the second stage; the delay stage. However, his relaxed measures disappointed pound traders who then priced in a much bigger economic impact to the UK economy, dragging on the pound lower
After a tense 48 hours in Downing Street and a U-turn by the government, mass gatherings have now been banned. Measures such as isolating the elderly and quarantining entire families could be brought forward given that the epidemic is escalating more quickly than originally expected. The prospect of more draconian measures is boosting sterling.
