GBP/SEK Outlook:
The pound (GBP) is likely to decrease against the Swedish krona (SEK) as it currently trades below its 90-day average and is near recent lows. Political uncertainty in the UK could further pressure the currency.
Key drivers:
• Rate gap: The Bank of England's dovish approach contrasts with the Riksbank's focus on potential rate cuts due to disinflation risks.
• Risk/commodities: Oil prices are currently stable, which supports SEK given Sweden's trade patterns.
• One macro factor: Recent political turmoil in the UK, including a by-election viewed as a crucial test for Labour leadership, adds to the GBP's weakness.
Range:
GBP/SEK is expected to drift within its recent range, primarily staying close to current levels barring significant developments.
What could change it:
• Upside risk: A surprising outcome in UK political events could boost GBP.
• Downside risk: Continued fallout from political instability might push GBP lower.