Pound to Swedish Krona Forecast: 11.8631 in Three Months

The Swedish Krona outperformed all other major currencies in the penultimate session of the week, pushing the GBP/SEK exchange rate back toward its late March lows and in the process jeopardising Sterling's 2021 uptrend after the Riksbank sought to confront a growing inflation problem.

The Krona topped the major currency rankings in the penultimate session of the week after the Riksbank signalled that it could be about to shift to a ‘hawkish’ interest rate stance that some analysts say would act as a catalyst for a turnaround by the beleaguered Swedish currency.

Pound Sterling can advance further against the Swedish Krona, forecast foreign exchange analysts at Swedish lender Handelsbanken.

The Krona was walking wounded on Thursday after the Riksbank expanded its quantitative easing programme, although local as well as international analysts still see the Swedish currency as likely to achieve new highs against the Euro and other rivals in the months ahead. 

The Swedish Krona weakened over a percent on Thursday after the Riksbank decided to hold the refinancing rate that it offers to banks unchanged at –0.25%, with a view to keeping the rates 'lower for longer', in line with sluggishly low growth and inflation.

Swedish Krona rises against Sterling after surprise increase in Q2 growth, SEK extremely undervalued but if growth returns Riksbank could start raising rates. Wildfire damage is a potential spoiler.

The Swedish Krona (SEK) is the most undervalued currency in the G10 on a Purchasing Power Parity (PPP) valuation basis, according to Bloomberg News.

The Swedish krona has been the second worst performing major currency (behind the pound) in 2016 as the Swedish Riksbank has pressed an iron gauntlet firmly down on interest rates via one of the most uncompromising negative interest rate policies in the world, however, this is distorting the kronor’s ‘true’ value.