The GBP to SEK exchange rate is currently facing downward pressure, recently trading at 90-day lows near 12.39, which is 1.4% below its three-month average of 12.56. Over the last few months, the pair has remained within a stable range of 2.5%, oscillating between 12.39 and 12.70. This stability is largely influenced by contrasting monetary policy expectations from the Bank of England (BoE) and the Riksbank.
Analysts note that the British pound is struggling due to mounting speculation regarding potential rate cuts by the BoE. Recent economic signs suggest a sluggish UK economy, leading investors to anticipate multiple cuts in interest rates through 2026. As the market awaits the release of the latest UK GDP data, forecasts indicate only a modest recovery, which could further diminish the pound’s position.
In contrast, the Swedish krona has demonstrated relative strength. The Riksbank has already implemented rate cuts, lowering the policy rate to 1.75% in September and hinting at additional cuts. This proactive approach has helped bolster the SEK against other currencies, supported by stable inflation rates aligning with ECB targets.
Recent reports indicate that nearly half of UK fund managers are planning to increase their FX hedging strategies for 2026, reflecting heightened volatility in the pound. Additionally, while the pound has recently strengthened against the US dollar, it continues to ease against the Euro, highlighting a divergence in performance among currencies, influenced by the differing monetary policies of the UK and the Eurozone.
In summary, the outlook for GBP to SEK appears cautious as market sentiment leans towards a fragile UK economy and potential rate cuts from the BoE, while the SEK may continue to benefit from a stable policy environment and favorable economic indicators.
