Swedish Krona Soars as Riksbanker Praises Jobless Data, FX Movesby
Riksbank’s Jansson says jobless report reveals ‘good’ numbers
Jansson describes latest krona developments as ‘gratifying’
A deputy governor at Sweden’s central bank described the latest set of economic data as encouraging and signaled policy makers were content with developments in the currency market, suggesting Scandinavia’s largest economy is less likely to see more monetary stimulus this cycle.
The krona rose as much as 0.6 percent after the comments, with one euro costing 9.3053 Swedish kronor as of 1:43 p.m. in Stockholm.
The latest movements in the Swedish krona have been “gratifying,” Per Jansson, a deputy governor at the Riksbank who is considered a so-called policy dove, told Bloomberg in Stockholm. He also described the 7.3 percent April jobless rate published in a report on Tuesday as “a good number.” Unemployment was 7.7 percent in the previous month. He said the data may yet prove “choppy” in the months to come.
“We have a forecast that still contains some decline, but there’s great uncertainty,” Jansson said. “It’s very much affected by migration flows” and how immigrants to Sweden find employment in the long term, he said.
The Riksbank’s next monetary policy decision is due to be announced on July 6. The bank kept its benchmark rate at minus 0.5 percent in April, following a 15 basis point cut in February.
Jansson cautioned against pegging expectations to one set of data, and said the Riksbank needs to be prepared for possible sudden shifts, including in the exchange rate.
“We’ve learned that this can turn around quite quickly and that just within a few days it can look completely different again,” he said. “But of course, there are some bright spots.”
Risks that continue to cloud the horizon include Britain’s June 23 referendum on its European Union membership and the outcome of Greek debt-relief talks.
“It’s a turbulent environment we’re working in,” Jansson said.