Swedish krona has seen a lack of trading activity during the first trading day of the week. Despite the broad-based weakness seen across Pound’s crosses, the GBP/SEK exchange rate closed up on Monday settling at 12.3984. Before the London opening session the GBP/SEK exchange rate was seen quoted around 12.3917.
In the short-term, there are no domestic factors to motivate investors getting more involved with the Nordic currencies. Riksbank policymakers have often blamed the Brexit market theme as a source of volatility for the SEK. In this regard, this week’s BEO interest rate decision can stir some SEK volatility.
Other proxy risk events that can disrupt the market volatility are key manufacturing data coming out of the EU zone. On Thursday, German industrial production data will be in focus. The German manufacturing sector has been contracting for 15 consecutive months. This is important because Sweden’s cross-border sales towards EU accounts for over 70%. A lackluster European demand can impact Sweden economy and the krona.
Next on the docket, we also have Eurozone services and manufacturing PMI figures. If these hard economic data shows contraction in the European manufacturing sector, it may lead to capital outflow from the Swedish krona.
Sweden’s central bank Riksbank is also scheduled to release the minutes from the October meeting. Riksbank governor Stefan Ingves cited weaker inflation along with other external factors as a motive to announce an interest rate hike in December from -0.25% up to 0.00%. The minutes should shed some light on the reasons behind its assessment to keep the benchmark interest rate at 0.00 for several years. Sweden’s manufacturing and private services figure will be released along with the Riksbank minutes. This should give investors a more comprehensive view of the Sweden’s economic growth.
GBP/SEK Technical Pattern
The short-term price action is characterized by a range-bound activity, but the long-term trend remains bullish. To get more traction it would need a daily break and close below the key support level 12.3111, or above 2019 high, established at 12.6149.