The GBP/SEK currency pair bounced off a 40-month low of 12.1145 on Monday, as the most recent UK data tempered expectations of monetary policy easing by the Bank of England, while SEK traders awaited Sweden’s Riksbank verdict later this week.
Stronger-than-expected UK retail sales and PMI data prints from last Friday prompted some analysts to reconsider the timing of further BoE easing, with calls for imminent rate cuts pushed back.
The BoE is anticipated to keep interest rates without change at its upcoming meeting in February. According to Reuters, markets are fully pricing in a quarter-point rate reduction by June, reflecting a more gradual path for policy normalization than previously expected.
Meanwhile, Sweden’s Riksbank is expected to leave its key policy rate intact at 1.75% at its January 29th meeting.
In December, policy makers again indicated that borrowing costs would likely remain at this level for some time.
The Riksbank also noted that economic prospects had improved, while inflation was approaching the 2% target.
Sweden’s annual consumer inflation has remained stable at 0.3% in December, the lowest rate since May, the latest data showed.
And, Sweden’s consumer price index with a fixed interest rate (CPIF), Riksbank’s target variable for inflation, went up 2.1% year-on-year in December.
The GBP/SEK currency pair was last up 0.24% on the day to trade at 12.2275.
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