February 11, 2019 - Written by John Cameron
STORY LINK Pound Sterling Swedish Krona Exchange Rate Slips as UK GDP Hits Six-Year Low
This morning, the Pound Sterling Swedish Krona (GBP/SEK) exchange rate slid after the release of a slew of worse-than-expected UK economic data, and is currently trading at an inter-bank rate of 11.94kr.
The UK reported 1.3% GDP growth in 2018, showing that annual growth had hit a six-year low, with Rob Kent-Smith, Head of GDP at the Office of National Statistics (ONS) stating:
‘GDP slowed in the last three months of the year with manufacturing of cars and steel products seeing steep falls and construction also declining. However, services continued to grow with the health sector, management consultants and IT all doing well.’
While this slowing of the UK economy has been attributed to Brexit anxieties, UK Trade Secretary, Liam Fox saw other reasons, stating:
‘Clearly there are those who believe that Brexit is the only economic factor applying to the UK economy.
‘I think you’ll find that the predicted slowdown in a number of European economies is not disconnected from the slowdown, for example, in China.’
GBP/SEK Exchange Rate Slides as UK Manufacturing falls into Recession
All three main sectors of the UK economy contracted (industrial, construction and services) pointing towards a softer start to 2019.
Commenting on the slowdown in fourth quarter growth, UK Chancellor Philip Hammond said:
‘It’s a solid performance from the economy when you look at what’s happening globally and in other competitor countries.
‘But of course there is no doubt that our economy is being overshadowed by the uncertainty created by the Brexit process.
‘The soon[er] we can resolve that the better, and the quicker we can get back to more robust growth in the future.’
Further bad news for the Pound came from the release of the manufacturing production figure, showing that manufacturing had contracted -0.7% in December.
The data showed that the sector had fallen into a recession as it contracted for the sixth consecutive month in a row.
Earlier: Swedish Krona (SEK) Sentiment Increases Following Positive Industrial Production Stats
Data has showed that Swedish industrial production saw significant growth in December.
Industrial production rose by 2.1% in December compared to the previous month, which saw this to be highest month-on-month increase since September 2017.
The Pound Swedish Krona (GBP/SEK) pairing fell to a low of 11.95kr this morning, likely due to both the positive figures from Sweden buoying SEK and the UK’s disappointing GDP.
GBP/SEK Outlook: Will Brexit Anxieties Cause Sterling to Fall Further?
With Brexit still a catalyst for movement in the Pound, Theresa May is due to give her latest statement to the House of Commons on Tuesday.
The Pound Sterling Swedish Krona (GBP/SEK) exchange rate is likely to see movement tomorrow ahead of Governor of the Bank of England (BoE), Mark Carney’s speech.
If Carney remains positive that the UK economy will remain resilient, it could see the Pound rise, although after data releases this morning this seems unlikely.
Wednesday will see the Riksbank’s latest interest rate decision, with expectations being the bank will hold rates steady at -0.25%.
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TAGS: Daily Currency Updates