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.
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.
Dean Popplewell
Latest posts by Dean Popplewell (see all)
- Euro zone bond yields sink as German manufacturing slows - 24 July 2019
- How Boris Johnson Plans to Deliver Brexit in 100 Days - 24 July 2019
- Weak PMI’s Sink EUR - 24 July 2019