The current market bias for GBP against SEK is range-bound.
Key drivers for this stability include:
- Interest rates: The Bank of England is expected to cut rates to 3.25%, while the Riksbank remains steady at 2.25%, creating a narrowing interest rate differential.
- Economic indicators: UK growth is projected to slow down to 1.2%, while Swedish GDP is forecasted to increase to 2.6%. This disparity may support the SEK.
The expected trading range for GBP to SEK in the upcoming months suggests slight fluctuations around current levels.
An upside risk for the GBP could arise if UK economic data outperforms expectations, prompting a stronger outlook. Conversely, a downside risk may emerge from any unexpected deterioration in UK fiscal policy, which could lead to further downward pressure on the pound.