Swedish Krona Sees a Volatile Session: More Easing and the FOMC
Swedish krona ends on a weaker note after rallying
The Swedish krona ended on a weaker note against the US dollar on October 28, 2015, after trading at a stronger note in the early hours of trading. The Swedish krona showed strength even as the central bank, Riksbank, increased its monetary stimulus in line with the dovish stance maintained by the ECB (European Central Bank). The policymakers, however, did not indicate any cut in the interest rate of 0.35% going forward, increasing investor sentiment for the Swedish krona. An appreciating Swedish krona has been a worry for the country’s policymakers, as exports are losing their competency.
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Positive economic data releases
Macroeconomic data on October 27, 2015, was broadly positive. The trade balance in September increased to a surplus of 3.3 billion Swedish krona against a surplus of 1.2 billion Swedish krona a year ago and a deficit in August. Household lending growth continued its upward trajectory, increasing on an annual basis by 7.26% in September. Business confidence in October reached an index level of 109.8 compared to 108.3 last month. Consumer confidence also increased marginally in October to 98.8 from 98.7 in the previous month. Growth in producer prices remained unchanged from the previous month at a decrease of 1.4% in September.
Impact on the market
The iShares MSCI Sweden ETF (EWD), which trades on the New York Stock Exchange, rose 0.60% on October 28, 2015. The WisdomTree Europe Hedged Equity ETF (HEDJ) was also trading on a positive bias and rose 1.86%.
The Swedish ADR (American Depositary Receipt) LM Ericsson Telephone Company (ERIC) ended the day 0.84% higher. Among other Scandinavian ADRs, petroleum company Statoil ASA (STO) rose 0.31% while fisheries major Marine Harvest (MHG) rose 4.9%.