Pound To Swedish Krona Forecast – Is Now The Best Time To Buy SEK From GBP?

GBPSEK Forecast Highlights

• GBPSEK rallying into multi-year highs (in favour of GBP) at 14.0
• Riksbank in sustained monetary easing cycle on recessionary fears
• The current bull trend favours a further advance into 14.0-14.5

How has the Pound performed against the Swedish Krone recently?

In line with its neighbour’s (Norwegian Krone) currency, the Swedish Krona is continuing to show major weakness against major currencies. The market is seemingly failing to see any economic brightness in this region.

Versus Pound Sterling, at the dawn of Trump 2.0, the rate is exerting immense pressure on the psychological barrier at 14.00 (see below). This potential breakout is the culmination of the long-running uptrend since late 2020. Technically, it is harder to draw a straighter and firmer uptrend support than the one registered on the chart.

Why is the the Swedish Krona so weak? To answer this you do not need to dig deep. A quick glance at the Riksbank Business Survey, conducted on October 29, tells you all you need to know about the state of the Swedish economy:

The manufacturing industry no longer believes that the economy will improve in the near future, and optimism in the retail trade sector has also declined compared with the spring. Weak demand is putting pressure on selling prices…….For the construction sector, the situation remains tough, and they now believe that it will take even longer to see a clear upturn in the demand for housing…….The retail trade remains the most optimistic sector. But even there, optimism has been tempered compared to the spring.

In other words, mostly gloom and doom. No wonder traders are selling the Krona at every bounce. With this severe gust of headwinds battering the economy, GBPSEK is likely to trend like before – up.

Is it a good time to buy the Swedish Krona with pounds?

Pound Sterling has been running positively against the Swedish Krona for the past few years.

This is an amazing run and if you do need the currency now, as the Christmas holiday season is starting soon, you may wish to take advance of GBP’s current strength to buy some Swedish Krona.

I would eye to complete most SEK purchases at around 14.0. This area is a major resistance and few are expecting the multi-year ceiling to give way yet. Take advantage of GBP strength to buy more Swedish Krona.

Will the pound get stronger against the SEK in the 2025?

Technically, the answer is yes. The rate’s uptrend is steadfastly bullish despite all the economic and political hiccups on the UK side. Remember the UK budget debacle two years ago? Only a dip (below 12.0) in the rate.

As visible on the chart, GBP even pushed to new multi-year highs against SEK in November. This is a long-term breakout and may attract more momentum-based funds selling into SEK weakness.

Furthermore, the Swedish central bank has fingers ready on the ‘rate cut’ button. The Swedish monetary easing cycle is well underway. Given the poor economic outlook, this accommodative cycle will only accelerate in the next few months. Lower interest rates may dampen Krona’s performance.

In fact, some news reports are already speculating that the Swedish economy is mired in a ‘technical recession’.  Inflation is fast becoming yesterday’s battle.

What could dent the current optimism in GBPSEK? If the Swedish currency is acting poorly, then GBP must perform even worse to drag the rate into 12.0-13.0. Day-to-day data headlines, however, suggest this is not yet in place. The UK appears to be in a better economic position than Sweden.

If we compare UK’s recent GDP numbers against that of other G7 countries, Britain is neither the best nor the worst economy right now (see below). Its relative ranking has improved somewhat over the past 12 months.

Therefore, Sterling is expected keep the upward pressure against the Swedish Krona into the year-end.

Source: HoC/OECD (Nov ’24)

What is the GBPSEK forecast in weeks, months, and years?

Despite the above-mentioned economic trends, the market consensus is that GBPSEK will not advance too much from here.

The strange thing is that most predictions see the rate below 14.00 in the next 3-4 quarters. Is the market too bearish on GBP against SEK? Perhaps.

But these are just expectations. The definitive pattern of rising lows in GBPSEK since 2021 favours further gains – and I would stick with the prevailing market trend for now.

Source: poundsterlinglive.com (Nov 2024)