November 25, 2020 - Written by John Cameron
STORY LINK Pound to Swedish Krona (GBP/SEK) Exchange Rate Slips as UK Economy Begins an ‘Emergency’ Period says Chancellor
GBP/SEK Exchange Rate Falls as UK Economic Outlook Darkens
The Pound to Swedish Krona (GBP/SEK) exchange rate slipped today, with the pairing currently trading around 11.385kr.
Sterling fell today following remarks from Chancellor Rishi Sunak, who warned that the UK economy was at the beginning of an ‘emergency’ as Covid-19 and Brexit uncertainty could severely limit the British economy.
Nevertheless, the Office for Budget Responsibility (OBR) offered a glimmer of hope, saying that an early coronavirus vaccine rollout would speed up Britain’s economic recovery.
The OBR commented:
‘The announcements that the Pfizer-BioNTech and Moderna vaccines had achieved excellent results in preventing infection in late-stage clinical trials, which arrived just as our forecasts were being finalised, is undoubtedly very positive news.’
Meanwhile, Brexit uncertainty is limiting the appeal for the Pound, with fears that the UK could crash out the European Union (EU) without a post-Brexit trade agreement.
Michel Barnier, the EU’s Chief Negotiator, also warned that he would pull out of Brexit talks should the UK refuse to compromise on a trade deal.
Consequently, demand for GBP has begun to slip as the outlook for the British economy remains largely uncertain going into 2021.
Swedish Krona (SEK) Edges Higher Despite Concerns Over Sweden’s Covid-19 Crisis
The Swedish Krona rose against the Pound (GBP) today despite concerns over Sweden’s economy as the nation’s coronavirus cases rose by over 25% in November alone.
Anders Tegnell, Sweden’s Chief Epidemiologist, said that the ‘issue of herd immunity is difficult’ and was providing difficult in battling the Covid-19 crisis.
Mr Tegnell added:
‘We see no signs of immunity in the population that are slowing down the infection right now.’
As a result of rising Covid-19 cases, confidence in the Swedish Krona has begun to slip, slightly weakening the SEK/GBP exchange rate against previous weeks.
Nevertheless, with hopes of a global rollout of Covid-19 vaccines, the outlook for Sweden’s economy looks comparably good than with the rest of Europe.
GBP/SEK Forecast: Fading Brexit Optimism Could Drag Down Sterling
Swedish Krona (SEK) investors will be awaiting tomorrow’s interest rate decision from the Swedish Riksbank.
Sweden’s national bank is expected to hold interest rates at 0%, but any downbeat commentary about the nation’s economy would prove SEK-negative.
Tomorrow will also see the release of Sweden’s Consumer Confidence data for November. If this confirms forecasts and rises to 94.4, then the SEK/GBP exchange rate could edge higher.
The GBP/SEK exchange rate will likely remain subdued, however, with Brexit optimism quickly fading as a no-deal seems more and more likely as the year draws to a close.
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TAGS: Pound Sterling Forecasts