Swedish Krona Suffers as CPI Drops & Unemployment Grows
The Swedish krona declined today as the unemployment rate climbed and consumer prices declined, fueling speculations that the central bank will lower interest rates next week.
The Consumer Price Index fell 0.1 percent in November following the increase by 0.4 percent in October. That was the first decline of consumer prices in three years. The seasonally adjusted unemployment rate rose to 8.1 percent in November, touching the highest level in two years.
The krona was also soft on fears that the global economic slowdown will hurt the Swedish banking system. Mattias Persson, the Director and Head of the Financial Stability Department at Riksbank, said in the interview to Bloomberg:
The euro crisis and the problems in the euro area are the biggest threats to the Swedish financial system right now,” he said. “The uncertain situation abroad entails increased risks to the Swedish financial system.
USD/SEK rose from 6.6493 to 6.6681 as of 20:50 GMT today and its daily high was at 6.6981. EUR/SEK went up from 8.6927 to 8.7199.
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Earlier News About the Swedish Krona:
- Swedish Krona Rises with Growing GDP (2012-11-29)
- Swedish Krona Dips as Manufacturing Contracts (2012-11-01)
- Riksbank Keeps Repo Rate Stable, Hints on Easing (2012-10-25)
- Swedish Krona Weakens as Consumer Confidence Deteriorates (2012-10-24)
- Krona Rises as Ingves Speaks About Dangers of Low Interest Rates (2012-10-18)