The Norwegian krone is at its strongest against the Swedish since last October. It makes shopping trip across the Swedish border cheaper.
Thursday you had to pay 98.70 Norwegian kroner for 100 Swedish write newspaper Dagens Næringsliv. Currency Strategist Nils Kristian Knudsen at commercial bank Capital Markets explains the weak Swedish krona with the Riksbank’s expectations for the economy in the “cute brother.”
– They are taking down the interest rate path; on the basis that one envisions slower growth, especially in 2017, says Knudsen.
Wednesday the Swedish central bank decided to let the key rate stand at -0.5 percent, while the growth forecast and the interest rate path thus were adjusted down. Inflation expectations as well.
Nordea Markets believes the Swedish currency is “undervalued”, but said it could be weakened by declining growth and increased risk in the housing market.
– In fact, the Swedish krona is in danger of reliving what the Norwegian krone did in 2013, writes Nordea Markets. At that time the downturn started for the Norwegian krone, which since 2013 has been 25 percent lower compared with their main trading partners.
Source: NTB scanpix / Norway Today