Sweden’s krona may strengthen to almost a record level against the euro, according to Credit Suisse Group AG, citing technical indicators.
The krona will reach 8.0480 per euro as long as it stays stronger than the area from 8.4635 to 8.5052, research analysts wrote today in a client note. The Swedish currency’s strongest level since the shared currency’s 1999 inception is 8.0469, reached in May 2000.
“We would view any strength as corrective,” the analysts wrote, referring to the euro. “While below the price hurdle at 8.5052, the intermediate risks are still lower to 8.0480.” A call to Credit Suisse was not immediately returned.
The krona rose 0.8 percent to 8.2732 per euro at 12:38 p.m. in New York after gaining as much as 1 percent to 8.2546, its strongest level since June 2000.
A break through the 8.2612 level “turns the focus immediately lower,” according to the note.
Sweden, one of only 12 nations ranked AAA at the three biggest credit-rating companies, has seen its currency strengthen after emerging as a haven from Europe’s debt turmoil. The krona has also gained after central banks in other havens such as Denmark and Switzerland stepped up efforts to counter a capital influx using currency interventions and rate cuts.
Norway’s krone rose to its highest level since 2003 against the 17-nation currency, gaining as much as 1.1 percent to 7.2585.
“There’s a lot of focus on these currencies as safe havens with strong fundamentals,” Niels Christensen, chief currency strategist at Nordea Bank AB in Copenhagen, said in a telephone interview. “There’s a double effect of demand for these currencies and a weak euro. A lot of investors are favoring these currencies.”
In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index.