GBP/SEK Exchange Rate Strengthens on Brexit Deal Optimism
The Pound to Swedish Krona (GBP/SEK) exchange rate is ticking higher this morning, as Sterling sentiment is bolstered by hopes of positive progress in Brexit talks this week.
At the time of writing the GBP/SEK exchange rate is trading at SEK11.6885, up roughly 0.5% from this morning’s opening rate.
Pound (GBP) to Soar if Brexit Deal is Struck this Week
The Pound (GBP) has kicked off the week on some solid footing, fuelled by some optimism that the UK and EU may be able to reach a post-Brexit trade deal as formal talks resume this week.
Both sides have expressed their desire to reach a deal and GBP investors are hopeful that the fast approaching deadline will help to refocus talks and get an agreement across the finishing line
‘Brexit talks resume this week and despite all the noise, both sides want a deal. The EU and UK are about 90% there. The problem is the remaining elements and without these sorted there is no deal.
‘Nevertheless there is hope that they will enter the ‘tunnel’: the period of closed, detailed talks that would lead to a deal. If there is white smoke this week then Sterling will rally strongly.’
However the UK’s government’s internal markets bill remains a potential flashpoint between the two sides.
Mohit Kumar, managing director at Jefferies, writes:
‘We are hopeful that a last minute deal would be reached, but the negotiations have become complicated following the recent UK Internal Markets bill, which is likely in breach of international law.’
Should a deal not be found this week, then it’s likely we could see the pound infused with fresh volatility, as the prospect of the UK economic facing a no-deal Brexit as well as stricter Brexit restrictions over the winter will fill GBP investors with dread.
Swedish Krona (SEK) Dented by Weak Retail Sales Figures
At the same time, the Swedish Krona’s (SEK) is struggling to put up much of a fight against the Pound (GBP) this morning, following the publication of Sweden’s latest retail sales figures.
According to data published by Statistics Sweden, sales growth contracted by 0.3% in August, with growth in July being revised down from 1.9% to 0.7%.
Further limiting the appeal of the Krona is the recent communication from the Riksbank, in which it indicated that interest rates are likely to remain on hold at 0% until at least 2023.