The Swedish economy is once more at the forefront of Scandinavian news, with the krona (SEK) bullish against its primary rivals. After an increase to the short-term repo rate by the Riksbank, forecasts on the SEK appear to favor additional gains throughout 2011, but the cost exporters will bear from this increase has become a concern.
A variety of industries in Sweden have benefited from the competitiveness of Swedish goods. The Swedish telecom industry continues to hold a strong competitive edge, with Ericsson posting steady growth. Truck-maker Volvo AB Asia also posted a 50% increase in sales over the last nine months.
The downside to the latest upsurge in the krona, however, has been that manufacturers and a variety of retail companies are suffering losses from a decline in exporting power. The rising price of raw materials and crude oil has gouged Sweden’s manufacturing industry, as SKF AB – a leading ball-bearing manufacturer – reported lower than expected profits; citing high raw material prices as a factor.
As the Riksbank recently increased its short-term repo rate to 1.50%, the krona has seen continuous gains. The EUR/SEK posted a sharp drop today, following the Riksbank decision, from 8.7809 to as low as 8.7426. The USD/SEK witnessed a similar drop from 6.5000 to as low as 6.4572 before retracing back to its current price of 6.4640.
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Greg Holden is the Chief Market Analyst at ForexYard. Greg uses his detailed knowledge of fundamental and technical analysis to provide some of the leading market forecasts in the forex world today. A guest lecturer at forex symposiums and Chief Editor of ForexYard's analysis center, Greg brings highly detailed and easy-to-use market analyses to his clientele. He has been published on ForexYard's Trading Blog and affiliate websites. Greg holds degrees in Political Science and Economics from Missouri State University, as well as a Masters degree in Middle Eastern History.
