Krona, the major currency of Sweden has jumped up to a 4-month high against Euro, the shared currency of the Euro region. Riksbank actually decided against any sort of monetary easing for weakening the currency and the same helped Krona a lot. Today, Krona posted a gain of 0.9% against Euro and is currently at 8.4918. This marks the strongest level for the currency since 2nd October, 2012. On one point of day, it was actually traded at 8.5022 per Euro. It also jumped up against Dollar by 1%. It is currently priced at 6.3031 per USD, marking its strongest value since 4th February. Today’s gains helped Krona to become the best performing major currency against currencies such as Yen, Dollar and Euro.
The Chief Currency Strategist of SEB AB, Carl Hammer stated that the decision of Riksbank did not come as a surprise to him or other investors either. However, what is amazing them is that the strength of Krona is by no way having any significance, on the eyes of Riksbank.
This weekend in Moscow, Finance Minister from the Group of 20 countries will meet. They will focus on the possible threat of international currency wars. Currency war, incidentally, marks a fight for boosting the trade competitiveness with help of weaker exchange rates. On last month, the Finance Minister of Sweden, Anders Borg stated that the policy of Riksbank which involves not cutting down the rates further is helping Krona to jump up. Borg also commented that an increased Krona does not help the country in sustaining a recovery.
The repo rate was kept unchanged at 1% by the Central Bank on today. This decision was kind of expected by many analysts, whereas, some thought that the same will be cut down to 0.75%.
Sweden is definitely experiencing some growth in industries and as a result, many feel that the economy will recover in this year. Sweden has also been helped by the boosted confidence that Europe has emerged from the fiscal turmoil, one of the worst ones that the region has ever faced.
Incidentally, the European Central Bank left the benchmark rate unchanged on last week and the same was kept at a record low of 0.75%. The economic confidence in the Euro region reached a 7-month high in last month, thereby easing pressure on the banks for lowering rates.