GBP/SEK: Krona edges down ahead of Swedish CPI data

The GBP/SEK currency pair was a notch firmer on Wednesday, after data revealed UK economy had expanded 0.2% month-over-month in January, in line with market consensus, and ahead of Swedish consumer inflation report due out tomorrow.

The largest positive contribution to the GDP came from the services sector, as it registered a 0.2% growth following a 0.1% contraction in December.

Conversely, industrial production shrank at a monthly rate of 0.2% in January, after rising 0.6% in December.

Compared to January 2023, the UK economy shrank 0.3%, again in line with market estimates.

The GDP figures were released a day after separate data showed UK wage growth had been the slowest since October 2022 in January.

Markets are fully pricing a 25 basis point rate cut by the BoE by August, while the chance of a cut by June stands at nearly 50%.

Meanwhile, Krona traders are now expecting Sweden’s February CPI data. The country’s annual consumer inflation accelerated to 5.4% in January from a 22-month low of 4.4% in December.

Market consensus points to a slowdown to 4.7% in February.

Last month, Sweden’s Riksbank indicated that interest rates might be cut sooner than previously expected, possibly in the first half of 2024.

The central bank kept its key policy rate intact at 4.0% at its February meeting, in line with market expectations.

Currency Pair Performance

As of 10:15 GMT on Wednesday the GBP/SEK currency pair was edging up 0.10% to trade at 13.1055.