Published: 2 Jul at 4 PM Tags: Euro, America, UK, Eurozone, USA, Sweden,
Mark Carneyâ€™s first policy meeting as Governor of the Bank of England and the European Central Bankâ€™s rate decision, both taking place on Thursday, might be the biggest pieces of European economic news scheduled for this week, but there are other events investors will be looking out for.
One such event is the Riksbankâ€™s rate decision, due for publication at 08:30 GMT tomorrow. Economists have forecast that the Swedish central bank will hold rates at 1 per cent.
At the central bankâ€™s last meeting it held rates at their previous level and pushed back the prospect of a rate increase for over a year due to a strong currency and weak demand causing consumer prices to decline for five months.
As chief economist Roger Josefsson observes: â€˜There are no really strong reasons to change the rate here and now. The outlook for the Swedish and international economy has improved and the Krona weakened. Household debt continues to rise at a pretty rapid pace.â€™
The Kronaâ€™s position as a â€˜safe-havenâ€™ in the face of tumultuous economic times in Europe, and the currencyâ€™s subsequent strength, has been impeding the Riksbankâ€™s attempts to reach its 2 per cent inflation target. But last week the Kronaâ€™s recent surge was brought to an abrupt end as the currency was sold off in the wake of speculation surrounding the Federal Reserveâ€™s intentions regarding reining in quantitative easing.
However, according to a recent report by the Financial Times, the Swedish Krona is on the brink of strengthening once more. All the currency needs is a little push from the Riksbank.
Some investors believe that if the central bank should shock markets by taking a less dovish stance tomorrow the Krona could climb, perhaps even recouping all of its recent losses.
As stated by Citi industry experts: â€˜With SEK longs unwound amongst heightened post Fed volatility, calmer asset markets could cool Krona headwinds.â€™
The Krona is currently trading against the Euro in the region of 8.6953 Krona per Euro
As of Tuesday, 2nd July 2013, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.1675, GBP USD exchange rate was 1.5151,