April 15, 2020 - Written by John Cameron
STORY LINK Pound Swedish Krona (GBP/SEK) Exchange Rate Steady as Swedish Inflation Slumps to 5-Year Low
GBP/SEK Exchange Rate Rangebound as Swedish Ramps Up Spring Budget
The Pound to Swedish Krona (GBP/SEK) exchange held steady today with the pairing currently trading around 12.50kr.
The Swedish Krona (SEK) failed to gain against the Pound (GBP) after March’s Sweden’s inflation report, which slumped to its slowest annual pace in 5 years due to the nation’s partial business shutdown.
However, with Sweden now due to spend more than 100 billion Swedish crowns in its spring budget to counter the negative economic effects of the coronavirus, the GBP/SEK swiftly stabilised.
Sweden’s Finance Minister Magdalena Andersson commented:
‘The measures we have presented are unprecedented in Swedish history. We have a very good starting position with the lowest government debt since 1977.’
Swedish Krona (SEK) investors are also becoming increasingly becoming concerned over the price of oil, with oil being one of Sweden’s largest and most lucrative exports. However, as oil prices continue to fall, we could see SEK begin to sink against many of its peers.
GBP/SEK Exchange Rate Steady as UK Coronavirus Death Toll Increases
The Pound (GBP) failed to gain on the Swedish Krona (SEK) today as the UK continues its battle with the coronavirus, with the hospital death toll rising by 761, bringing the total up to 12,868 deaths from the virus.
Sterling was helped, however, by the newly appointed Labour leader, Keir Starmer, who urged the Government to release plans on how the UK would ease its nationwide lockdown.
The call for these plans increased hopes that the UK could be provided with further clarity on how the economy will begin to recover following the peak of the coronavirus crisis.
However, concerns are growing over the UK’s economic outlook after Chancellor Rishi Sunak said that he was ‘deeply troubled’ over the OBR’s warning of a -35% in UK GDP.
Rishi Sunak said at Downing Street’s daily coronavirus press conference:
‘When we come out of this in terms of righting the ship, we’ll have to look at it then. Obviously, this has cost a lot. But as I’ve said before, the best way out of this for all of us is to just grow the economy, which is why trying to keep as much of it as intact as possible at this moment allows that bounce-back when we come out of it and allows us to hopefully snap back to normal as quickly as possible.’
GBP/SEK Forecast: UK Coronavirus Developments in Focus
Swedish Krona (SEK) traders will be keeping a close eye on oil prices this week, with any further signs that prices could fall weakening confidence in the oil-sensitive Swedish currency.
Tomorrow will see a speech by Silvana Tenreyo, a member of the Monetary Policy Committee at the Bank of England (BoE). Any dovish comments that would further add to the UK’s bleak economic outlook would prove Pound-negative.
The GBP/SEK exchange rate will be dictated by the UK’s coronavirus developments this week, with any indications of an increasing death toll – or an extended lockdown – weakening Sterling.
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TAGS: Pound Sterling Forecasts