GBP/SEK Exchange Rate Fluctuates after Unchanged Riksbank
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While the Pound recouped losses against peers like the US Dollar and Euro, it continued trending in a weaker position against the Australian Dollar, New Zealand Dollar, South African Rand and Swedish Krona.
Markit’s UK Services PMI climbed from 59.1 in July to 60.5 in August even though economists had expected it to decline to 58.5.
UK Composite PMI, which takes into account the nation’s Construction and Manufacturing PMI’s, came in at 59.3 in August, up from a negatively revised 58.6 the previous month.
In a statement published with the UK data, Markit economist Chris Williamson observed; ‘An acceleration of growth in the vast services sector and an on-going construction boom offset a weakened performance in manufacturing in August. The three PMI surveys indicate that the economy grew at the fastest rate since last November, providing ammunition for policymakers arguing for higher interest rates.’
However, it wasn’t all positive news and Williamson added; ‘The worry is that growth remains too dependent on the domestic economy, raising the risk that higher interest rates will derail the upturn. Any hopes of a rebalancing towards exports have been derailed by the Ukraine crisis.’
As the UK’s services sector accounts for around 70% of total domestic growth a report of this nature would ordinarily have seen the Pound rally, but lingering concerns regarding the outcome of the fast-approaching Scottish referendum are taking a toll on the British asset.
The Pound to Swedish Krona exchange rate hit a low of 11.5113.
The Pound Sterling to Swedish Krona exchange rate also continued trading in a softer position in spite of the news that growth in the Swedish services sector slowed considerably last month.
The nation’s own services PMI stood at 60.1 in July – well clear of the 50 mark separating growth from contraction, but fell to 54.2 in August due to slides in the employment and new orders sub indices.
The services gauge has come in above 50 every month for over a year.
Meanwhile, the Euro to Swedish Krona (EUR/SEK) exchange rate slumped markedly on Wednesday as the Eurozone published disappointing retail sales data.
Retail sales were shown to have fallen by -0.4% in July on a month-on-month basis. A drop of -0.3% had been anticipated. On the year retail sales increased by 0.8%, less than the annual increase of 0.9% predicted.
Earlier in the session the Eurozone’s final services and composite PMI had been negatively revised.
The Euro to Swedish Krona exchange rate hit a low of 9.1857.
Pound Sterling to Swedish Krona (GBP/SEK) Forecast
Tomorrow both the Swedish Risksbank and the Bank of England are due to deliver their interest rate decisions.
It is expected that neither central bank will make any changes to interest rates, but a surprise move would have the potential to trigger intensive market movement.
The Pound Sterling to Swedish Krona (GBP/SEK) exchange rate is currently trading in the region of 11.5317.
The Pound Sterling to Swedish Krona exchange rate is currently trending in the region of 11.5171.
Sweden’s central bank Riksbank has opted to continue with the current interest rate of 0.25%. This was not a surprise to economists, but the Swedish Krona has seen erratic movement since the publication of the decision. This could be as a result of the failure to address the cooling inflation, although Governor Stefan Ingves has warned that excessive easing may fuel Sweden’s record consumer debt burden.
The Pound to Swedish Krona exchange rate is likely to experience heightened volatility today as the Bank of England policymakers meet later in the day to make their interest rate decision.