The Pound Sterling to Swedish Krona (GBP/SEK) exchange rate fell by over 0.25% on Friday after the Governor of Sweden’s Central Bank asserted that the nation’s consumer debt is expanding.
Yesterday the Riksbank opted to leave the benchmark repo rate at 0.25%.
The central bank also asserted that it will begin tightening fiscal policy by the end of next year.
Today Governor Stefan Ingves rated comments levelled yesterday regarding household debt and asserted that he was ‘very worried’ about the economic situation in the Nordic nation.
Ingves was quoted as stating; ‘Debt is continuing to rise and that means that the risks in the Swedish financial system are increasing all the time and that’s not good. We need to put in place policies in Sweden that gradually reduce the debt ratio. I’m very worried about households’ rising indebtedness and that’s an issue that also needs to be dealt with outside of monetary policy.’
The Pound to Swedish Krona exchange rate hit a low of 11.5180
The Krona also came under pressure as domestic industrial production figures fell short of forecasts.
Industrial production in Sweden was shown to have plummeted by -5.7% in July on a year-on-year basis. Economists had only expected a -0.6% annual decline.
On the month, industrial production fell by -1.1% following a revised increase of 0.8% in June. A gain of 1.18% had been anticipated.
The Pound, meanwhile, was little changed following the publication of the Bank of England’s 12 month inflation expectation report. The central bank upwardly revised its projection for inflation in the year ahead from 2.6% to 2.8%.
The central bank also revealed that public expectations for an interest rate hike occurring in the next year have surged to their highest level for over three years. Of those surveyed, 49% now expect an interest rate increase to take place in the coming year.
The Euro to Swedish Krona (EUR/SEK) exchange rate recovered some of its ECB rate cut-inspired losses on Friday, achieving a high of 9.1819.
Pound Sterling to Swedish Krona (GBP/SEK) Forecast
Next week the Swedish Krona could be affected by Sweden’s inflation rate data and the nation’s unemployment report.
Economists have forecast that inflation eased by -0.03% in August on a month-on-month basis after falling by -0.3% in July. The unemployment rate is believed to have risen to 7.2%.
If these influential ecostats give cause for concern the Pound Sterling to Swedish Krona exchange rate could advance.
The UK’s economic reports, including trade balance data, will also be of interest.
The Pound Sterling to Swedish Krona (GBP/SEK) exchange rate is currently trading in the region of 11.5317.
Swedish Krona (SEK) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
, Swedish Krona,11.5561,
Euro,, Swedish Krona,9.1710,
US Dollar,, Swedish Krona, 7.0786,
Australian Dollar,, Swedish Krona, 6.6008,
New Zealand Dollar,, Swedish Krona,5.8503,
Canadian Dollar,, Swedish Krona,6.5111,
[/table]
