2011 has seen a series of positive fundamental indicators out of the US that have boosted the greenback against most of its main currency rivals, including the Scandinavian kroner. As the employment and manufacturing sectors in the United States have steadily been improving, confidence in the dollar has rebounded. In the last week alone, the USD/DKK has gone up more than 2000 pips, while the USD/NOK and USD/SEK have both increased close to 1900 pips.
Against the euro, the kroner have had significantly better luck. Renewed euro-zone debt worries, this time out of Portugal, have caused the 17-nation common currency to tumble over the last week. Investor concerns with the euro-zone combined with the generally positive data out of the US have led to a fairly bleak picture for the euro. Both the Norwegian and Swedish currencies have capitalized on the euro-zone debt issues, and have gone up around 1000 pips against the troubled currency in the last week.
Turning to the rest of the week, traders will want to pay attention to the main publications out of the US, including the latest Unemployment Claims figure and Retail Sales report. Early forecasts are calling for slight improvements in both indicators. If the predictions are true, traders can expect the kroner to maintain its current bearish trend against the US currency. With regards to the euro, kroner traders will want to keep up with the latest news regarding Portugal and any possible bailout if may receive. Any positive news out of the euro-zone is likely to be to the detriment of the kroner.
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Dan Eduard is a Market Strategist with ForexYard. His addition to the ForexYard team has brought a unique new perspective to our clients. Dan's ability to compare and contrast trans-national issues with events in the market is uncanny and many clients so far have used his advice to make leaps and bounds in their trading strategies. He has been published on the ForexYard Trading Blog and affiliate websites. He carries a BA in Political Science and an MA in History.
