Swedish Krona (SEK), Norwegian Krone (NOK) Exchange Rate Forecast: Norwegian Retail Sales in Focus
Swedish Krona (SEK) Exchange Rate Forecast
The Swedish Krona advanced on the Pound on Monday in response to slightly below-forecast UK data and impressive Swedish retail sales stats. The GBP/SEK exchange rate was trading in the region of 11.7662 for much of the European session, having lost over 0.3%.
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While the UK’s mortgage approvals data signalled a cooling of the UK housing market, Sweden’s retail sales report outlined a sturdy rebound. Sales in the nation surged by 1.9% on a month-on-month basis, a considerably stronger increase than the 0.6% forecast and the largest monthly increase since the spring of 2013.
The data helps to alleviate some of the pressure on Sweden’s central bank to cut interest rates beyond their current record lows.
According to economist Torbjorn Isaksson; ‘Swedish households are well off and we have continuing strong demand in the Swedish economy. It is hard to see what would turn that around. On this margin, this indicates the Riksbank will not cut the repo rate again.’
On the year retail sales were up 4.6%. Economists had anticipated a year-on-year gain of 3.4%.
Although the Pound is deriving support from the recent Scottish referendum and Bank of England rate hike expectations, the GBP/SEK exchange rate could continue trending lower if this week’s UK fundamentals fail to impress.
Swedish reports to be aware of over the next few days include; Swedebank Manufacturing PMI, forecast to have risen from 51.0 to 51.7, Services PMI and Industrial Production figures.
The Pound Sterling to Norwegian Krone (GBP/NOK) exchange rate fell by over 0.2% on Monday to hit a low of 10.4563. The decline was largely the result of the UK’s lacklustre Mortgage Approvals and Net Consumer Credit data.
Last week Sterling was bolstered as Bank of England Governor Mark Carney asserted; ‘With many of the conditions for the economy to normalise now met, the point at which interest rates also begin to normalise is getting closer. While there is always uncertainty about the future, you can expect interest rates to begin to increase.’ However, as the BoE has made it clear that the path of interest rate increases is data dependent; the Pound remains reactive to any less-than-spectacular domestic reports.
In the hours ahead the Pound Sterling to Norwegian Krone exchange rate could fluctuate in response to Norway’s retail sales report. Sales fell by -1.5% in July month-on-month but are expected to have increased by 0.5% in August. If this report impresses, and if the UK’s second quarter GDP figure undergoes no revisions, the GBP/NOK exchange rate may soften.
The only other Norwegian report to be aware of this week is the nation’s NIMA Manufacturing PMI, due for publication tomorrow. If the gauge falls from 51.8 to 50.8 in September as forecast, it would undermine demand for the Krone.
Yesterday the Pound Sterling to Swedish Krona exchange rate hit a high of 11.8085
The Pound Sterling to Norwegian Krone exchange rate hit a high of 10.4972