GBP/SEK Exchange Rate Muted amidst Brexit Uncertainty
The Pound to Swedish Krona (GBP/SEK) exchange rate is stuck trading close to a three-week low this morning as ongoing Brexit concerns keep the pressure on Sterling.
At the time of writing the GBP/SEK exchange rate is trading at around SEK11.5650, virtually unchanged from this morning’s opening levels.
Pound (GBP) Undermined by Brexit Concerns
The Pound (GBP) is struggling to find support against the Swedish Krona (SEK) and majority of its other peers this morning in the face of renewed Brexit jitters.
Sterling sentiment had shown signs of improving on Thursday after reports suggested the EU may be willing to compromise in regards to its demand for a ‘level-playing field’, a key sticking point so far in talks.
However, any optimism towards a possible Brexit deal has been punctured by recent comments from both the UK and EU.
On the UK side, we have Boris Johnson’s Brexit negotiator, David Frost, who warns that the EU must give more leeway if any progress is to be made:
‘Some of the EU’s unrealistic positions will have to change if we are to move forward.
‘UK sovereignty, over our laws, our courts, or our fishing waters, is of course not up for discussion.’
Of course this sentiment is echoed by the EU, with the president of the European parliament, David Sassoli telling the Guardian:
‘Together, we are very worried because we don’t see great enthusiasm from the British authorities and we don’t see a strong will to get to an agreement that satisfies all parties.
‘Obviously as an agreement, it has to satisfy both parties that it cannot advantage one over the other. And this puts us in a situation in which at the moment we are frankly a little bit worried.’
Swedish Krona (SEK) Buoyed by Positive Retail Sales Figures
Meanwhile, the Swedish Krona (SEK) remains well supported this morning thanks to upbeat Swedish economic data.
SEK investors welcomed Sweden’s latest retail sales figures, which revealed sales continued to grow in May, beating forecasts that the coronavirus crisis may have prompted a sharp fall in sales growth.
This is likely helped by Sweden’s unique approach to the outbreak, with most shops in the country remaining open throughout the pandemic.
GBP/SEK Exchange Rate Forecast: Brexit to Dominate Next Week?
Looking ahead to next week’s session, its safe to assume that Brexit will act as the main catalyst of movement in the Pound to Swedish Krona (GBP/SEK) exchange rate as ‘intensified’ trade talks between the UK and EU get underway.
While recent reports suggest the EU may be willing to compromise on its demand for a ‘level-playing field’ it’s clear that there are a number of other major issues facing talks, and analysts are pessimistic about the Boris Johnson’s suggestion that a deal could be reached in July.
Should progress remain limited next week, its likely we can expect Sterling to remain on the back foot.
Meanwhile, the focus for SEK investors next week will be on the Riksbank’s latest rate decision.
While the Swedish central bank is expected to leave interest rates on hold next week, we may see the Krona face some headwinds if policy makers remain open to a possible rate cut if economic conditions do not improve.