GBP/SEK Outlook:
Bearish, as the rate is below its recent average and near recent lows, facing pressure from several factors.
Key drivers:
- Rate gap: The Bank of England has maintained its interest rate at a relatively low level compared to the Riksbank’s recent cuts, making the GBP less attractive.
- Risk/commodities: The stability in oil prices is not providing support to the GBP, which is sensitive to broader market movements.
- One macro factor: Mixed economic indicators in the UK, such as rising inflation and retail sales, can't offset the uncertainty surrounding the current political landscape.
Range:
GBP/SEK is expected to hold within its recent range but may drift lower given current pressures.
What could change it:
- Upside risk: An unexpectedly strong UK GDP report could provide a lift to the GBP.
- Downside risk: Continued political instability in the UK could exacerbate the GBP’s decline.