Sweden’s Krona Drops as Output Data Fuels Rate-Cut Speculation
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.
The krona fell against 14 of its 16 major peers, touching the weakest level in more than four months versus the euro. Economists surveyed by Bloomberg had forecast a 1.3 percent increase in output. The Riksbank last month pushed back the timing of its first rate increase to support growth. Norway’s krone tumbled to a three-year low against the euro.
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 8.8085 at 2:35 p.m. London time. It earlier reached 8.8516, the weakest level since June 25. Sweden’s currency slid 0.9 percent to 6.5921 per dollar. The two-year note yield was little changed at 0.97 percent.
Norway’s krone fell 1.1 percent to 8.2022 per euro, after touching 8.2318, the weakest level since October 2010. It declined 1.5 percent to 6.1367 versus the dollar, headed for a weekly drop of 2.7 percent.
The krona has tumbled 1.3 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 1.6 percent.
To contact the reporter on this story: Lucy Meakin in London at email@example.com.