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Pound Swedish Krona (GBP/SEK) Exchange Rate Steady as Covid-19 Vaccine Hopes Buoy Sterling

November 11, 2020 - Written by John Cameron

GBP/SEK Exchange Rate Covid-19 Vaccine Hopes Buoy Confidence in UK Economic Recovery

The Pound Swedish Krona held steady today, with the pairing currently fluctuating around 11.422kr.

Sterling has continued to benefit from news from Pfizer, the pharmaceutical company which announced that it had achieved a 90% success rate in its Covid-19 vaccine trials.

Matt Hancock, the British Health Secretary, said yesterday:

‘We do not yet know whether or when a vaccine is approved, but I have tasked the NHS with being ready from any date from 1 December.’

Brexit has also remained in focus this week.

Despite Prime Minister Boris Johnson’s defeat over the Internal Market Bill in the House of Lords, it looks like Downing Street is going to power ahead anyway.

However, with US Democrat Joe Biden now the President-elect, it looks more likely that the UK and the EU could draw up a draft trade agreement soon.

With the Democrats previously criticising the UK’s handling of Ireland in Brexit talks, this has since added pressure on Downing Street to concede on a UK-EU trade deal.

Ireland’s Foreign Minister Simon Coveney comments:

‘I think we may well be likely to go into next week on these negotiations. We’re not there yet. What I would say is the UK government understand only too well what’s needed for an agreement here. I don’t believe the EU ask is unreasonable and the EU also needs to show some compromise to accommodate many British asks.’

Swedish Krona (SEK) Steady as Sweden’s Covid-19 Situation Worsens

The Swedish Krona held steady against many of its peers today as Sweden’s Covid-19 situation appears to have worsened in recent weeks.

As a result, SEK investors are remaining cautious as the outlook for Sweden’s economy remains uncertain for the fourth quarter.

Dr Johan Nöjd, Uppsala's regional infectious diseases doctor, commented:

‘We need to bring in tougher restrictions which are backed by law, because we’ve now seen that these recommendations are too toothless.’

Last week also saw Sweden bring in a rule of eight for diners amid a spike in Covid-19 infections.

Sweden’s central bank said in its Financial Stability Report:

‘The increased spread of the coronavirus during the autumn means that restrictions and changes in behaviour will slow down an economic recovery in the near term.’

GBP/SEK Outlook: Could Positive UK Economic Data Boost Sterling This Week?

Swedish Krona investors will be awaiting tomorrow’s release of October’s Consumer Price Index.

Any improvement in the outlook for Sweden’s economy would prove SEK-positive.

Meanwhile, Pound investors will be keeping a close eye on tomorrow’s release of the flash UK GDP data for the fourth quarter.

Any significant growth in the UK’s GDP last sector would provide a boost for Sterling.

Tomorrow will also see the release of the UK’s manufacturing production and industrial data. Again, any improvement in the UK’s economy would see the GBP/SEK exchange rate rise.

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