GBP/SEK Outlook:
The GBP/SEK rate is slightly weaker, but likely to move sideways, as it trades just below its recent average and amidst uncertainties in the UK. Political factors are weighing on the Pound while the Krona benefits from its stable performance.
Key drivers:
• Rate gap: The Bank of England's dovish outlook on interest rates contrasts with the Riksbank's concerns over the SEK's strength and potential cuts, impacting the currency comparison.
• Risk/commodities: Recent fluctuations in oil prices may indirectly affect the currencies, with the GBP vulnerable to UK economic growth fears, while stable oil could support SEK.
• One macro factor: The UK’s slowing economic growth rate, projected to be around 0.9%, introduces additional pressure on the Pound.
Range:
Expect the GBP/SEK to hold within its current range, as the market reacts to ongoing political instability in the UK and economic forecasts.
What could change it:
• Upside risk: A surprising turnaround in UK political stability that restores confidence in the Pound could bolster its value.
• Downside risk: If the Labour Party loses the recent by-election, negative sentiment surrounding leadership could weaken the GBP further.
