Swedish Krona Climbs as Ingves Damps Intervention Speculation
The krona climbed from near the lowest in two months against the euro after central bank Governor Stefan Ingves signaled policy makers probably won’t seek to weaken the Swedish currency.
The krona strengthened against all but one of 16 major peers tracked by Bloomberg after Ingves said its appreciation is “not that remarkable” given the nation’s economic outlook. His comments came after the Riksbank published the minutes of its September policy meeting. The currency surged to the strongest in more than 12 years against the euro last month. Sweden’s economy will expand 1.1 percent this year, according to median forecast of 16 analysts compiled by Bloomberg.
“The minutes and these quotes from Ingves paint a picture that there is no such plan to actively try to weaken” the krona, said Arne Lohmann Rasmussen, chief analyst at Danske Bank A/S (DANSKE) in Copenhagen. The comments may be “yet another indication that the Riksbank has accepted a strong Swedish krona.”
Sweden’s currency appreciated 0.6 percent to 8.5703 per euro at 3:39 p.m. London time, snapping a three-day decline. It depreciated to 8.6443 yesterday, the weakest since July 17. The krona rose 0.2 percent to 6.5605 per dollar.
The krona reached 8.1771 per euro on Aug. 13, the strongest since June 15, 2000. It has gained 2.5 percent in the past year, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-nation currencies. The euro lost 4.1 percent.
“The krona is at a level which is stronger than many times before, but it’s not an extraordinary or different krona strength,” Ingves told the Swedish parliament’s finance committee in Stockholm today. “That’s perhaps not that remarkable since we have a big current-account surplus and we have sound public finances or generally a decent economic development compared with others.”
Sweden’s currency has appreciated as investors sought the krona as a haven from turmoil in the euro-region debt markets. It was supported today as traders bought the safest assets amid concern Spain will delay seeking a bailout needed to resolve its financial crisis.
“People are looking around and saying maybe we should stick a bit to our safe-haven positions because the euro crisis is obviously not being solved,” Rasmussen said.
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