August 21, 2020 - Written by John Cameron
STORY LINK Pound to Swedish Krona (GBP/SEK) Exchange Rate Edges Higher as Swedish Unemployment Remains High
GBP/SEK Exchange Rate Rises as Swedish Unemployment Back at Financial Crisis Levels
The Pound to Swedish Krona (GBP/SEK) exchange rate rose by nearly 0.3% today, with the pairing currently fluctuating around 11.537kr.
The Swedish Krona (SEK) continued to struggle today following yesterday’s release of the Swedish unemployment rate for July, which remained high at 8.9%. As a result, SEK traders have become jittery as unemployment reached financial crisis levels.
Olle Holmgren, an economist at bank SEB, commented on the data:
‘We are in principle back at the peak of unemployment during the financial crisis. The peak in a single month in 2009 was at 9.3 per cent, adjusted for seasonal variations.’
In other Swedish economic news, today saw the release of the second-quarter capacity utilisation gauge. This fell below forecasts, shrinking from -0.3% to -6.3%. With Swedish production capacity being so weak, SEK investors are becoming concerned for the nation’s growth in the months ahead.
Meanwhile, Sweden recently recorded its highest death tally in 150 years for the first half of 2020. Consequently, this has left many Swedish Krona (SEK) investors worried about the impact of the coronavirus on the nation’s economy.
Pound (GBP) Edges Higher as UK Services PMI Beats Forecasts in August
The Pound (GBP) edged higher against the Swedish Krona (SEK) today following the release of the UK services PMI for August, which beat forecasts and rose from 56.5 to 60.1. As a result, Sterling investors have become more optimistic about Britain’s economic recovery in the months ahead.
Duncan Brock, the Group Director at CIPS, commented on the report:
‘With the fastest rise in activity in the private sector since October 2013, this shows an encouraging speed towards recovery which belies the fact there are still some dark forces at play. Rising inflation, the sustainability of the UK economy during a global pandemic and the poor employment figures means we’re not out of the woods yet.’
Meanwhile, today saw the release of the UK’s retail sales figure for July, which rose to a better-than-expected 3.6% month-on-month, while the year-on-year figure also beat forecasts at 1.4%.
Ruth Gregory, the senior UK economist at Capital Economics, said that the data suggests that the ‘recovery in physical shops was more impressive than the headline figure and that shoppers are starting to return to the High Street’.
GBP/SEK Forecast: Could Brexit Trade Deal Hopes Boost Sterling?
Swedish Krona (SEK) traders will be looking ahead to Tuesday’s release of Sweden’s PPI figure for July. If the month-on-month data edges higher, then we could see SEK edge higher on growing hopes for Sweden’s economic recovery.
Brexit developments will remain in focus for Sterling traders next week. However, if UK-EU trade relations show any signs of improvement, then we could see the Pound soar on hopes of a post-Brexit trade deal.
Pound (GBP) traders will be awaiting Tuesday’s publication of the UK CBI distributive trades survey for August. If this confirms forecasts and plummets by -25%, then we could see the GBP/SEK exchange rate suffer.
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TAGS: Pound Sterling Forecasts