GBP/SEK Exchange Rate Falls as UK Joblessness Increases
The Pound to Swedish Krona (GBP/SEK) exchange rate fell by -0.2% today, with the pairing currently fluctuating around 11.468kr.
The Pound (GBP) fell today following the release of August’s UK ILO Unemployment Rate figure, which rose by a worse-than-expected 4.5%.
Frances O’Grady, the general secretary at the TUC, was downbeat in his analysis, saying:
‘We are on the precipice of an unemployment crisis. Ministers must act now to protect and create jobs. The expansion of the job support scheme is a step in the right direction, but it still falls short.
Today also saw the release of the UK Claimant Count Change for September, which beat forecasts and fell from 73.7 thousand to 28 thousand.
Jing Teow, a senior UK Economist at PwC, commented:
‘The labour market continued to show signs of recovery, supported by the phased easing of lockdown restrictions throughout the summer, which has boosted business activity and consumer demand.’
Meanwhile, the UK’s economy looks increasingly set to suffer after Brexit, with the House of Lords Committee chair Baroness Donaghy saying:
‘[The British services sector], and the people who depend on it for their livelihoods, will suffer if its needs are not reflected in the UK’s negotiations with the EU. We are concerned that they have been overlooked in the negotiations so far.’
With a lack of any clear progress towards a UK-EU post-Brexit trade deal, GBP investors are remaining cautious.
Swedish Krona (SEK) Rises as Swedish Economy Remains Strong
The Swedish Krona (SEK) edged higher today despite a weaker-than-expected Swedish Consumer Price Index figure for September.
The data showed an unexpected slip from 0.8% to 0.4% year-on-year, while the month-on-month figure rose by just 0.1%.
Statistics Sweden explains:
‘This increase was mainly offset by falling prices on fuel. Downward contributions came from recreation and culture, in particular prices for package holidays. Other downward contributions came from lower prices for electricity and fuel, accommodation and telephone equipment.’
Meanwhile, optimism remains relatively high for Sweden’s economy, which looks to be one of the least affected by the Covid-19 pandemic in Europe.
Analysts at Market Screener commented:
‘Even though spring was dark in Sweden, it seems that the industry has already taken a turn for the better. For the past four months, factory orders have increased on a monthly level and the orders for the motor industry, which particularly suffered during spring, are rapidly increasing. We have only just now seen the first restrained signs of a turn. The increasing orders support both the Swedish export sector and the job market.’
Could Further Hints of a Negative Interest Rate from the Bank of England Drag Down Sterling?
Swedish Krona (SEK) investors will be looking ahead to Thursday’s release of the latest Swedish Unemployment Rate for September.
If Swedish joblessness increases significantly, then the Swedish Krona could suffer a setback, weakening the SEK/GBP exchange rate.
SEK investors will be paying close attention to Sweden’s Covid-19 situation.
Any signs of the coronavirus infection rate dropping would prove SEK-positive.
Pound (GBP) traders will be awaiting tomorrow’s speech from the Bank of England’s (BoE) Chief Economist, Andy Haldane.
If the Bank of England hints at negative interest rates, then the GBP/SEK exchange rate would suffer.