Swedish Krona edges slightly lower against the British Pound as currency traders are eyeing next key inflation data from both the UK and Sweden. At the foreign exchange market, the GBP/SEK exchange rate settled up 0.26% at 12.3268, but the pair was seen quoted on Tuesday within a trading range of 12.2629 and 12.3278.
In Sweden, the Household Consumption data for the month of November missed the market expectation of 0.5% growth and came in at 0.0%. At the same time, the reading for October was revised down to 0.1% versus 0.2% initial reading. The weaker data prompted currency traders to bid lower the Scandinavian currency.
In other news, the Swedish PES unemployment inched higher by one tick to 4.0% in December compared to 3.9% previous reading. The lackluster economic data took a toll on Krona’s exchange rate. However, currency traders remained cautious ahead of key inflation data. The data will be published at 8:30 AM UTC.
Much attention will also be placed on Sweden’s inflation rate. This will be the first reading of inflation after the Riksbank ditched negative interest rates and brought the benchmark interest rate to 0.0%. In Sweden, the annual rate of inflation is running at 1.8%, but according to the market consensus, it’s expected to fall to 1.7%. At the same time, the inflation reading for December is expected to inch higher to 0.3% compared to 0.1% prior reading.
Elsewhere, inflation in the UK is expected to remain below the Bank of England’s target of 2%. With inflation at its lowest level in 3 years, the BoE will most likely be forced to cut interest rates to help spur the economy.
On the technical front, the GBP to SEK pair hasn’t made much progress. The GBP/SEK has stalled during the previous trading session as both the bulls and the bears have unwound their positions ahead of the inflation reading.
GBP/SEK was up 0.09% to 12.3389 in the late Asian session on Wednesday.
