Sveriges Riksbank

The Swedish Krona sustained fresh losses following the Riksbank's latest effort to strengthen the currency with a more hawkish calibration of its monetary policy, leaving a bullish market to lift GBP/SEK from its June lows, though other factors more particular to Sterling could yet marr the outlook for the latter.

Pound Sterling fell widely in the midweek trading session but its heaviest losses came in relation to the Krona after a new record for one measure of inflation appeared to stoke concerns about what might become of the UK economy as the Bank of England (BoE) effort to return inflation to the target continues from Thursday. 

The Swedish Krona rose against a falling Euro and a handful of other major counterparts in a resilient midweek performance after local inflation rose further for the month of February, placing the Sveriges Riksbank under a spotlight ahead of its April interest rate decision.

The Swedish Krona has outperformed notably in 2023 but was this week tipped as a sell by strategists at TS Lombard, who've advocated that clients buy the Norwegian Krone with the proceeds due to differences between inflation rates and risks embedded in the respective economies.

The Swedish Krona is the second worst performing major currency of the year and local analysts are worried about the outlook ahead of September's Sveriges Riskbank interest rate decision, which is set to be announced next week and ahead of a series of other central bank policy pronouncements.

The Swedish Krona has fallen to within striking distance of its coronavirus crisis lows so far in the year and could be at risk of further losses in the week ahead unless the Riksbank is able to convince a hawkish market of its plan for containing rising rates of inflation in Sweden’s economy.