Heading into the final day of trading for the week, the pair is on course to have rallied by 1.3% across the week; its third straight week of gains.
Today at 06:45 UTC, GBP/SEK is trading 0.1% lower at 12.5008, mid-way through its daily range of 12.4853 – 12.5311. As the number of coronavirus cases worldwide reach 1 million, investors remain glued on covid-19 developments and its impact on the economy.
Swedish Service Sector To Contract In March
The Swedish Krona trended lower in the previous session after warnings from the National Institute of Economic Research that Sweden’s economy will contract over 6% in the second quarter and 3.2% across 2020. The Think Tank said that economic policy was adopting a “strongly supportive role”. However, they said that more will need to be done to stem the rise in unemployment.
The report comes as the number of coronavirus cases in Sweden reaches 5568, with 103 fatalities. Sweden is one of the only Western countries not be in lock down, as the government takes a more relaxed approach to stemming the spread of coronavirus.
Today investors will also look towards Swedish service sector data for March. Analysts are expecting services purchasing managers index (PMI) to slip to 47, down from 56.7 in February. The figure 50 separate expansion from contraction. Whilst this would represent a significant decline in service sector activity, it would be considerably higher than the eurozone, for example, which is expected to see activity in the service sector decline to 28.2, a record low.
Brexit Transition Deadline To Be Extended?
The Pound rallied across the board on Thursday amid growing expectations that the Brexit transition period will be extended. Whilst the official line from Boris Johnson is that the date remains, the fact that there is no bandwidth for the government to focus on anything else, but coronavirus is telling.
Today investors will focus on the impact of coronavirus and the UK wide lock down, on the service sector. The final revision for the service sector PMI is expected to show another decline to 34.8. A weak reading could drag the Pound lower.