GBP/SEK Outlook:
The outlook for GBP/SEK is slightly weaker but likely to move sideways, as the rate is below its recent average and near the 3-month lower range. Continued speculation about a Bank of England rate cut is pressuring the pound.
Key drivers:
• Rate gap: The Bank of England's cautious stance on interest rates contrasts with the Riksbank’s shift toward accommodation, putting downward pressure on GBP against SEK.
• Risk/commodities: Recent declines in oil prices have contributed to a shift in risk appetite, affecting the value of both currencies.
• One macro factor: Concerns over UK inflation alongside speculation of a BoE rate cut have strained the pound.
Range:
The GBP/SEK exchange rate is expected to drift within its recent narrow range, facing resistance to sharp movements.
What could change it:
• Upside risk: An unexpected rise in UK retail sales could bolster GBP.
• Downside risk: Stronger signals from the Riksbank regarding a potential interest rate cut could weigh on SEK.