Investors watching the value of the Swedish krona (SEK) this week were hardly surprised at the stalled behavior seen these past few days. The SEK is, after all, linked with the performance of the global stock market. With Monday’s crash, the krona was held down, weighted by a wait-and-see approach by investors.
The SEK’s performance against the euro (EUR) these past few months has been most interesting. The EUR/SEK moved to a November 2010 low of 9.2968 in recent trading, with traders fleeing the euro zone from rampant debt concerns. Against the US dollar, the SEK has been somewhat mixed given the safe haven status of the buck.
Though Sweden has experienced solid fundamental data over the past few months, and even monetary tightening by the Riksbank, the poor performance of global stocks has taken precedence over other data. Traders are cautiously optimistic that Sweden’s economy and currency will return to high growth so long as a market panic does not set in.
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