The Pound (GBP) advanced to its highest level in a week against the Swedish Krona (SEK) on Wednesday due to the release of weaker-than-forecast confidence and GDP data in the Scandinavian nation.
Against other peers such as the Euro (EUR) and US Dollar (USD) the Pound was softer due to a lack of market-moving domestic data and as investors focused on key economic data releases due from the Eurozone and United States.
The GBP/USD exchange rate was trading at 1.692. The GBP/EUR exchange rate was trading at 1.263
The Swedish Krona sank against the majority of its most traded peers after Statistics Sweden released its latest GDP and confidence data.
Both figures came in below economist forecasts, suggesting that the Nordic economy is slowing more than expected.
GDP expanded by 0.2% in the second quarter, an improvement on the previous figure which showed a decline of -0.1% but disappointed analysts who had been expecting an increase of 0.6%. On an annual basis GDP increased by 1.9%, below the forecasted level of 2.4%.
‘This is disappointing and indicates that Sweden’s economic recovery isn’t as strong as we had expected. External demand is weaker and companies’ investments are delayed while consumers continue to spend,’ said Magnus Alvesson, head of economic forecasting at Swedbank in an interview with Bloomberg.
The weaker figure was likely linked to the ongoing weakness in the Eurozone. A stagnating Eurozone economy has reduced demand for Swedish exports which in turn has effected economic growth.
Also weighing upon the Krona was the release of softer than forecast consumer and business confidence data.
Consumer confidence dropped to 99.9 in July from the 101.3 recorded in June and business confidence weakened to 102.7 from 103.7.
With a lack of market moving domestic data the Pound is likely to see muted trading against its major peers. It could soften further against the Euro and US Dollar however if the major data out of those regions come in stronger than expected.
The next piece of data for Sweden comes on Friday.
The Swedbank Manufacturing PMI report is forecast to have shown signs of improvement this month and could lend support to the Swedish Krona.
UPDATED 10:45 GMT 31 July, 2014
Pound to Krona Exchange Rate Extends Declines
On Thursday the Pound Sterling to Swedish Krona exchange rate extended declines as the UK’s economic prospects were dampened by disappointing domestic consumer confidence and house price figures.
The GBP/SEK pairing shed a further 0.14% as the GfK gauge of UK consumer sentiment fell for the first time in six months, coming in at -2 rather than the 2 anticipated.
The Pound was broadly softer as the Bank of England’s deputy Governor asserted that the UK housing market has started to cool.
Further Pound to Krona movement could occur tomorrow after the Swedbank Manufacturing PMI is published.
The Pound Sterling to Swedish Krona is currently trending in the region of 11.6230.
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,11.6683 ,
Euro,,Swedish Krona,9.2407 ,
US Dollar,,Swedish krona,6.8907 ,
[/table]
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