The Swedish currency – already one of the year's winners among the so-called G10 currencies – rises by around 10 öre against both the dollar and the euro in Tuesday's trading.
A dollar costs 10.00 kronor at 1 pm. This is the strongest krona exchange rate against the dollar since intraday trading on Tuesday, March 11, when the dollar was down at 9.98 kronor.
In the intervening days of 2023, a dollar was down at 9.91 kronor. But before 2022, it was unusual for a dollar to be above 10 kronor.
A euro costs 10.82 kronor at the same time, which is the strongest krona exchange rate against the euro since autumn 2022.
Ongoing for some time
The strengthening against the euro has been going on since the beginning of February, and, for example, Handelsbanken noted in a market update about two weeks ago that there are several contributing factors to this.
The bank mentions, for example, that the krona is undervalued against the euro and that the public finances in the euro area are not as strong as they are in Sweden. The European Central Bank (ECB) is also expected to lower the interest rate by 0.50 percentage points during the year, while the Swedish Central Bank, according to Handelsbanken's assessment, will leave the interest rate at its current level. All this means that a gradual decline is now expected for the euro during the year.
Risk of upward correction
When it comes to the US dollar, however, an initial scenario with an upward correction for the dollar is seen, as the market's view of the US economy is deemed too pessimistic.
"In the slightly longer term, the uncertainty surrounding tariffs and potential inflation problems should decrease, while the Fed slowly continues with its interest rate cuts. Then the krona should be able to strengthen further against the dollar," writes Handelsbanken.
For households, there is an additional advantage to a stronger krona than just that the vacation fund becomes a little more valuable abroad. The risk of rising inflation may also decrease slightly, as a stronger krona can counteract higher import prices.
Corrected version: An incorrect year was stated in the headline in an earlier text.
