Bias: The GBP/SEK is currently bearish-to-range-bound, as it is just below the 90-day average and in the lower half of the 3-month range.
Key drivers:
• Rate gap: The Bank of England is signaling cautious rate cuts, while the Riksbank maintains its rate, supporting the SEK against the GBP.
• Risk/commodities: With oil prices trending lower, investors may prefer safer currencies like the SEK, impacting the GBP negatively.
• Economic growth projections: The UK's GDP growth is forecasted to slow, creating further pressure on the GBP against the SEK.
Range: The GBP/SEK is likely to hold within its recent range, showing limited volatility due to external factors.
What could change it:
• Upside risk: A sudden improvement in UK economic data could boost confidence in the GBP.
• Downside risk: Heightened geopolitical tensions could drive demand for safer assets like the SEK, further weakening the GBP.