July 29, 2020 - Written by John Cameron
STORY LINK Pound to Swedish Krona (GBP/SEK) Exchange Rate Rises Despite Promising Signs of Stabilising Covid-19 Rates in Sweden
GBP/SEK Exchange Rate Edges Higher as Swedish Consumer Confidence Dips in July
The Pound to Swedish Krona (GBP/SEK) edged higher today, with the pairing currently trading around 11.365kr.
The Swedish Krona (SEK) struggled today despite a stronger-than-expected Swedish Consumer Confidence figure for July. Although the figure dipped from 84.1 to 83.3, this was better than the forecast slide to 75.4.
Meanwhile, Sweden’s coronavirus figures show that the nation may have the virus under control.
Sweden’s state epidemiologist, Anders Tegnell, commented:
‘That Sweden has come down to these levels is very promising.
‘The curves are going down and the curves for the seriously ill are beginning to approach zero.’
However, SEK traders are remaining cautious as the global economy looks set to slow down, with the US economy and US-China trade tensions potentially jeopardising global economic recovery.
As a result, this has weighed on the Swedish Krona (SEK) owing to Sweden’s heavily export-reliant economy.
Pound (GBP) Rises as UK Mortgage Approvals Improve Four-Fold
The Pound (GBP) edged higher today after UK mortgage approvals rose four-fold at 40 thousand in June. As a result, GBP investors have become more optimistic about Britain’s economic recovery.
Analysts at Reuters said:
‘British mortgage approvals more than quadrupled last month from May’s record low and households showed signs of spending more, as the economy began to open up from the coronavirus lockdown.’
Meanwhile, GBP investors are feeling jittery about the dimming prospects for the British economy. The London School of Economics (LSE) predicted that the UK could be in for a double shock from both Brexit and the coronavirus pandemic.
Swati Dhingra, an economics professor who worked with the LSE on the report, said:
‘Our analysis shows that the sectors that will be affected by Brexit and those that are suffering from the Covid-19 pandemic and lockdown are generally different from each other.’
Consequently, Sterling’s gains against the Swedish Krona could be short-lived as the outlook for the British economy remains downbeat.
GBP/SEK Outlook: Could Brexit Pessimism Drag Down Sterling This Week?
The Swedish Krona (SEK) will remain sensitive to global economic developments this week. Any signs that US-China trade tensions could flare up would weigh on SEK.
The Pound (GBP) will also remain dictated by Brexit developments, with few UK economic data releases of note due out this week. As a result, we could see Sterling suffer if pessimism begins to grow over the possibility of a UK-EU trade deal ahead of December.
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TAGS: Pound Sterling Forecasts