- Jobless rate rises to 6.7 percent, higher than forecasts
- Riksbank official has said strong krona is `worrisome'
Sweden’s krona declined the most in two weeks against the euro after a bigger-than-forecast jump in unemployment stoked speculation the central bank will unleash further stimulus.
The woes of Scandinavia’s biggest economy are caused in part by the krona’s strength, after it rose versus 12 of its 16 major counterparts since mid-year. The currency’s gains are “worrisome” and becoming a concern for monetary policy, Riksbank Deputy Governor Martin Floden said last week.
“The combination of that unemployment data, which was weaker than expected, and then clearly some fear of the Riksbank” sent the krona lower, said Thomas Harr, an analyst at Danske Bank A/S in Copenhagen. “We know that the Riksbank is very focused on the krona.”
Sweden’s currency weakened 0.8 percent to 9.3822 per euro as of 4:10 p.m. London time, set for the biggest slide since Sept. 28. That’s after it reached a more than three-month high on Tuesday. Harr predicts a drop to 9.4 in the next three months, followed by a recovery.
The krona tumbled 1.5 percent to 8.2357 to the dollar, after reaching an almost four-month high earlier this week.
The currency’s recent strength has posed a challenge for a central bank that has unleashed unprecedented stimulus to fight off slowing inflation, including cutting interest rates to minus 0.35 percent and starting a program to buy as much as 135 billion kronor in government bonds, or about 23 percent of the total outstanding.
Sweden’s jobless rate climbed to 6.7 percent in September, from 6.4 percent the month before, the nation’s statistics agency in Stockholm reported Thursday. The median forecast of economists surveyed by Bloomberg was 6.6 percent.