The Pound advanced 2% versus the Swedish Krona across the previous week. This was its second straight week of gains, following extensive measure by the UK Government and the Bank of England to prop up the UK economy amid the coronavirus hit.
At 06:45 UTC, GBP/SEK is trading +0.4% higher at 12.3551, amid lock down extension warnings.
Social Distancing Until October?
The Pound is advancing versus the Swedish Krona at the start of the new week amid signs of optimism in the latest UK coronavirus figures. The coronavirus death toll in Britain rose by 209, to 1228 and infections jumped by 2,483 to 19,533. However, the rate of new infections has dropped for a second straight day and the number of deaths is less than the 30% increase which has been the norm recently. Whilst this is some much-needed good news it is still far too early to call victory.
The data comes as the government’s leading epidemiology adviser, Professor Neil Ferguson, said Britons would have to stay in lock down until June to prevent the full hit from the virus, with social distancing potentially until October. The economic impact of such an extended period of social distancing would be devastating and very difficult for the UK economy to rebound from.
Swedish Economy Facing Deeper Recession Than Financial Crisis
The Swedish Krona lost ground across the previous week amid growing concerns that the Swedish economy faces a deeper recession than in the 2008/9 financial crisis. Despite unprecedented economic stimulus, the largest Nordic economy is expected to experience unemployment in the region of 10% and a contraction in GDP of around -4% across the year. As recently as January Swedbank was predicting growth of 1.4% across the year.
The Riksbank, the Swedish central banks, has made it clear that it has no intention of cutting interest rates. The central bank will instead rely on other measures to prevent a credit crunch, such as including the purchase of corporate bonds and cheap banks loans.
On Friday retail sales data showed that sales increased at slower pace of 0.2% month on month in February, down from 0.9% the previous month. The data was from before the coronavirus outbreak escalated in Sweden.
Whilst there is no high impacting Swedish data due for release today, investors will digest the latest coronavirus developments.
