Pound Sterling to Swedish Krona (GBP/SEK) Exchange Rate Advances, GDP Below Forecast
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The GBP/SEK exchange rate surged by 0.6% during the European session.
The broad move lower came as Sweden’s economy was shown to have expanded by just 0.2% in the second quarter.
This just about wiped out the contraction of 0.1% recorded in the first quarter of the year but was considerably less than the forecast for quarter-on-quarter growth of 0.6%.
On the year the Swedish economy had been expected to expand by 2.4% but it actually only grew by 1.9% on a year-on-year basis.
Economist Torbjoern Isaksson said this of the result; ‘Remember that today’s GDP report is a flash estimate and that the figures, especially for certain components, should be taken with a pinch of salt. Nevertheless, it is a strong indication that the economy underperformed in the first half of the year.’
Isaksson added that the disappointing data did justify the position currently being adopted by the Riksbank.
Earlier in July the central bank chose to cut the main interest rate and slash its growth forecasts.
Separate Swedish figures revealed that the nation’s Business Confidence gauge slid from 103.7 in June to 102.7 in July while the measure of Consumer Confidence slipped from 101.3 to 99.9.
If today’s US employment and growth figures match or exceed expected levels the US Dollar to Swedish Krona (USD/SEK) exchange rate could extend gains in the hours ahead.
The Euro to Swedish Krona (EUR/SEK) exchange rate was little affected by the Eurozone’s industrial , consumer and business confidence reports.
Pound Sterling to Swedish Krona (GBP/SEK) Forecast
This morning’s modest improvement in the UK Lloyds Business Barometer had little to no influence on the direction taken by the Pound during the European session.
We forecast that the GBP/SEK pairing will largely retain today’s advance overnight.
Tomorrow’s UK GfK Consumer Confidence data could have some impact on the currency pair, as could Friday’s Swedbank Manufacturing PMI.
The UK is also scheduled to publish manufacturing data on Friday. If the nation’s Markit Manufacturing gauge surprises estimates by climbing from 57.5 in July rather than falling to 57.2 the Pound could end the week on a high.
The Pound Sterling to Swedish Krona (GBP/SEK) exchange rate is currently trending in the region of 11.6823.