Swedish Krona Declines on Rate Bets; Krone Tumbles After SolbergLucy Meakin
Sweden’s krona dropped after a report showed industrial production stagnated in September from a month earlier, boosting speculation that the nation’s central bank will cut interest rates to stimulate the economy.
Norway’s krone tumbled to a three-year low against the euro after Prime Minister Erna Solberg said her government is ready to cut its budget proposal should the exchange rate prove too strong for exporters to stay competitive. The Swedish Riksbank last month pushed back the projection for when it will raise interest rates, and economists surveyed by Bloomberg had forecast a 1.3 percent increase in today’s output data.
The weak data “will fuel speculation that the Riksbank will have to cut rates,” Arne Lohmann Rasmussen, head of foreign-exchange research at Danske Bank A/S in Copenhagen, wrote in an e-mailed report. “Needless to say that this is negative for the Swedish krona.”
The krona fell for the first time in five days against the euro, depreciating 0.5 percent to 8.8086 at 3:45 p.m. London time. It earlier reached 8.8516, the weakest level since June 25. Sweden’s currency slid 1.1 percent to 6.6049 per dollar.
Norway’s krone fell 1.4 percent to 8.2241 per euro, after touching 8.2334, the weakest level since October 2010. It declined 2 percent to 6.1672 versus the dollar, headed for a weekly drop of 3.3 percent.
The krona has tumbled 1.2 percent in the past month, the second-worst performer among 10 developed-market peers tracked by Bloomberg Correlation-Weighted Indexes after the krone, which slid 1.9 percent.