August 3, 2020 - Written by John Cameron
STORY LINK Pound to Swedish Krona (GBP/SEK) Exchange Rate Falls as Swedish Manufacturing PMI Beats Forecasts
GBP/SEK Exchange Rate Sinks as Outlook for Swedish Economy Improves
The Pound to Swedish Krona (GBP/SEK) exchange rate fell by -0.4% today, with the pairing currently fluctuating around 11.42kr.
The Swedish Krona (SEK) rose today following a stronger-than-expected Swedish Manufacturing PMI figure for July. The figure rose unexpectedly out of contraction territory from 47.6 to 51, buoying confidence in the Swedish economy.
Economists at EconoTimes, commented on the report:
‘While the figure has dropped significantly since its peak in April, it is evident that supply-chain distortions still are present even if they are normalizing since most trade partners reopened in June. Furthermore, inventories dropped further in July, indicating towards an uptick in demand.
‘Nevertheless, employment plans continue to be soft, consistent with expectations that unemployment has not peaked quite yet.’
Meanwhile, Swedish Krona (SEK) investors are optimistic that Sweden’s economy could be on the road to recovery.
Anders Tegnell, the chief epidemiologist at Sweden’s public health agency, said:
‘In many ways the voluntary measures we put in place in Sweden have been just as effective as complete lockdowns in other countries.’
Pound (GBP) Falls as Concerns Grow Over UK Coronavirus Cases
The Pound (GBP) struggled to gain on the Swedish Krona (SEK) today following the publication of the latest UK Markit Manufacturing PMI for July, which fell below forecasts from 53.6 to 53.3.
Rob Dobson, Director at IHS Markit, commented on the data:
‘The UK manufacturing sector started the third quarter on a much firmer footing, with output growth hitting a near three-year high and new orders rising for the first time in five months. The recovery strengthened as a loosening of lockdown restrictions allowed manufacturers to restart or raise production.’
However, with rising cases of Covid-19 having areas of northern England face a lockdown period, GBP investors are becoming increasingly cautious about Britain’s economic progress.
Any further signs of a spike in coronavirus cases could instigate more widespread lockdowns, and, as a result, further weigh on the nation’s economy.
Sterling traders are also feeling anxious ahead of Thursday’s interest rate decision from the Bank of England (BoE).
GBP/SEK Outlook: Could a Stronger-Than-Expected UK Services PMI Buoy Sterling This Week?
Swedish Krona (SEK) investors will be looking ahead to Wednesday’s release of the latest Swedish Industrial Production figures for June. If this beats forecasts, then we could see SEK continue to edge higher on growing hopes for the Swedish economy.
Pound (GBP) traders will be awaiting Wednesday’s publication of the UK Services PMI for July. If this improves, then we could see Sterling edge higher as the UK’s largest sector begins to recover from the coronavirus crisis.
The GBP/SEK exchange rate will likely remain subdued this week as Sweden’s economy continue to recover faster than most other countries in Europe. Nevertheless, rising Covid-19 cases in Sweden could drag down the Swedish Krona.
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TAGS: Pound Sterling Forecasts