April 29, 2020 - Written by John Cameron
STORY LINK Pound to Swedish Krona (GBP/SEK) Exchange Rate Steady as NIER Predicts 7% Drop in Swedish Economy
GBP/SEK Exchange Rate Rangebound as Sweden’s Economy ‘Worse Than Expected’
The Pound to Swedish Krona (GBP/SEK) exchange rate held steady today after the Swedish think tank, National Institute for Economic Research (NIER), predicted a -7% decrease in the nation’s economy in 2020. The pairing is currently trading around 12.298kr.
The NIER said in its statement:
‘The global economy is developing worse than expected which is hitting Swedish export companies.’
‘The indicators in the NIER’s company and household barometers fell in April to a new low and point to a rapid and powerful slowdown, not least in the services sector.’
Meanwhile, there is growing concern over Sweden’s handling of the coronavirus pandemic. Sweden took a notably light-touch approach, requesting rather than ordering its citizens to abide to lockdown rules such as avoiding necessary travel and social distancing.
However, Dr Johan Giesecke, Sweden’s former state epidemiologist, has remained insistent that Sweden has undertaken the right approach, saying:
‘We're trying to do the best we can with the knowledge we have. And so far if you look at the projections done by a number of modelers, the Swedish model has worked a lot better than people would have believed.’
If Sweden’s coronavirus cases continue to decline, however, then we could see the Swedish Krona rise on hopes that the nation has avoided an economic catastrophe.
Pound (GBP) Steady as UK Economic Outlook Darkens
The Pound (GBP) has suffered from a darkening UK economic outlook today, with major retailers like Next predicting a ‘faster and steeper’ fall than expected amid the coronavirus pandemic.
Simon Wolfson, Next’s Chief Executive, commented:
‘There is no way that we or the government can know. No one knows what next week’s infection rates will be and there’s no comparable event to what we are experiencing at the moment that allows people to use the past to inform a prediction about the future.’
Sterling has continued to struggle amid rising UK economic uncertainty. Instead, markets are awaiting further statements from the Government on the state of the nation’s Covid-19 crisis.
Furthermore, the UK bank Barclays has also suffered from the negative impact of the coronavirus. Today the bank announced that it was bracing for a surge in bad loans due to businesses and consumers not being able to pay back.
GBP/SEK Outlook: Could the Swedish Krona Rise as Covid-19 Cases Drop?
The Swedish Krona (SEK) will likely remain steady tomorrow as Swedish markets close for Sweden’s Labour Day.
However, Swedish Krona investors will be keeping a close eye on the nation’s coronavirus developments. If coronavirus cases and fatalities continue to drop, we could see the Swedish currency perform positively against its peers.
The GBP/SEK exchange rate will remain sensitive to any announcements from the UK Government this week. If Downing Street seems willing to ease lockdown measures in the near-them, then we could see the Pound edge higher.
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TAGS: Pound Sterling Forecasts