The Swedish crown tumbled half a percent on Monday, touching a new decade low versus the euro at 10.85, hurt by a combination of global trade tensions and signs deeply negative interest rates will not rise towards zero any time soon.
Against the dollar too the crown fell almost half a percent but held off record lows touched last week. The currency has lost about 7 percent this year against the euro and 9 percent to the dollar.
“The key trigger is that people have sort of given up on the expectation that the Riksbank will reach zero (percent) this year and we will live with negative interest rates for another year and that’s the main reason for this move,” said Richard Falkenhall, senior FX strategist at SEB in Stockholm.
He said the Sino-U.S. trade tensions were also exacerbating the weakness as was the March-May dividend payment season. Around 34 billion crowns are due to be paid out this week, of which a portion would likely be repatriated abroad, he added.
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