In early March reported News24 that the krona is believed to be strengthened by several banks, just in time for the summer and then continue to strengthen in the autumn.
Cheaper dollar and euro this summer, tracks SEB
The rescue is delayed
But unfortunately the rescue is delayed. Now the euro costs SEK 11.60 and the dollar stands at SEK 10.75.
That’s a big drop from December 2023, when one US dollar could be bought for less than one gold tia.
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The war in Ukraine
Many have worried that the Swedish krona may have been a poor currency for investment in the turbulent years since Russia’s invasion of Ukraine, with high inflation and shockingly high interest rates as a result.
Then international players preferred to stay in safe havens such as the euro and dollar. The cheap price of Swedish currency has benefited exports. Swedish industry is therefore still strong compared to, for example, Finnish industry, which is weighed down by the expensive euro.
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The Swedish krone exchange rate falls against the dollar and the euro. Photo: Google Currency The Riksbank was surprised
But now there are many who want to see a stronger krone.
And the Riksbank seems to have been surprised by the krona’s development.
Right now, the expensive foreign currencies are the main factor driving inflation apart from the geopolitical unrest in the world, writes Swedish daily newspaper.
Therefore, Handelsbanken does not believe that there will be any reduction on May 8.
Handelsbanken’s chief economist on the interest rate cut
Instead, you can imagine a reduction in June, says the chief economist Christina Nyman at Handelsbanken.
– I think it is mainly concern about the krona that is causing the Riksbank to refrain from lowering it in May. If the krona remains weak, or weaker than today, they could still lower if inflation is much lower than their forecast, or the economy significantly weaker, she tells Svd.
SEB about the dollar
Robert Bergqvist who is an economist at SEB rather believes that it is a matter of many people buying in dollars now that the American economy is gaining momentum, and hopes are rising for interest rate cuts in America.
– It is the same for other small currencies. The American dollar is in some kind of supertrend and, for example, the Norwegian krone has had the same development against the dollar as the Swedish krone, he says.
Erik Thedéen is head of the Riksbank. Photo: Claudio Bresciani / TTRiksbanken still has time
In other words, the latest interest rate announcement from the Governor of the Riksbank meant Erik Thedéen no traction for the weakened Swedish currency.
However, it can still change before the summer, according to Swedish Export Credit. The next interest rate announcement on May 8 may mean a strengthening of the krona, with little time left before the summer holidays, but which in such a case could raise the krona from the junk status it has received today.
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