The Swedish economy has been outperforming many of its regional neighbors over the past few years and traders are beginning to see a signal that its currency is breaking barriers.
The krona (SEK) touched a 2-year high against the US dollar (USD) yesterday, a high of 6.3886. As a recent safe-haven away from the sovereign debt crisis of the euro zone, the SEK also pushed towards a 10-year high against the euro (EUR), reaching 8.7830 before bouncing back to its recent price near 8.8200.
Sweden’s relative growth was highlighted by December’s trade surplus figures, revealing an expansion beyond the expected 7.9B SEK to a whopping 10.9B SEK. Growth in Sweden’s large telecom industry, with Ericsson leading the way, helped boost Swedish exports and drive the trade surplus to this December reading.
Swedish fashion retailer H&M, however, experienced a mild dip in Q4 profits, but announced its plans to open another 250 stores in fiscal 2011, citing market optimism. The stronger SEK has begun to gouge Sweden’s retail industry by increasing the price of domestic goods, but the impact has so far not been dire enough to dampen Sweden’s economic growth forecasts.
