Pound to Swedish Krona (GBP/SEK) Exchange Rate Rallies Following Carney Comments
The Pound has been trending higher against the Swedish Krona (GBP/SEK) on Thursday, presently trading in the region of 11.7880. The Pound strengthened its gains to reach the session high of 11.7940 in the mid afternoon, following the speech given by Bank of England (BoE) Governor Mark Carney in Wales
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Carney offered Sterling some support after he remarked on the red-hot topic of interest rate hikes in the UK. Furthermore, this week has seen other BoE officials remark that interest rates need to happen quicker than currently forecast.
BoE Deputy Governor Nemat Shafik commented that board members may have to ‘move more quickly’ in their attempts to normalise the UK economy, if increases in wages and productivity growth don’t match up. Weak wages have hindered the UK economic recovery and Carney has commented that substantial wage growth is expected to occur next year.
Shafik stated: ‘If those wage increases are not accompanied by productivity increases then I think we will have to move more quickly on rates because inflationary pressures will build up. If wage increases are expected but productivity is performing well we can wait no longer.
Thursday saw Governor Carney take a clearly hawkish stance in comparison to other statements in recent months, saying: ‘The economic outlook is much improved. While there is always uncertainty about the future, you can expect interest rates to begin to increase.’
Carney has offered Sterling some support against other currency majors, and enabled steady gains against the Krona. Thursday saw Swedish Producer Price Inflation (PPI) increase in August, rising to 2.7% in August from July’s 1.4% accelerating at the fastest rate since May.
Thursday’s PPI data showed a 1% increase took place in August following July’s stagnation, whilst export prices edged up by 1.7%. July’s PPI had cast a dampener on the Krona against other majors after figures showed the lowest levels of growth in four consecutive months. The GBP to SEK exchange rate will rely on Pound exchange rate movement to determine its value in the near future.
Pound (GBP) Exchange Rate Forecast
The Pound has experienced a quiet week this week by way of domestic data; however, next week will prove more influential for Sterling. Monday will see the release of UK Net Consumer Credit and Mortgage Approvals figures, whilst Tuesday will see Consumer Confidence and Gross Domestic Product numbers revealed. The Pound may continue to gain from Mark Carney’s comments today and enjoy support from the prospect of interest rate hikes occurring soon within the UK economy.
The Pound to Swedish Krona exchange rate extended its advance on Friday thanks to quiet trading conditions and the lingering impact of Bank of England Governor Mark Carney’s comments.
The appeal of Krona was also undermined by Sweden’s balance of trade data, which unexpectedly showed a deficit in the three months to August.
The deficit registered at 2.8 billion in August, down from a surplus of 2.4 billion in July.
Next week the Pound to Swedish Krona exchange rate could be effected by Swedish retail sales figures, the Swedbank Manufacturing PMI and domestic Industrial Production data.