On Friday morning, the US dollar cost 10.73 kronor. It's not only the lowest this year, but you have to go back to the beginning of November to find the last time the Swedish krona was as strong against the dollar as it is now.
The decline of the US currency is now clear and can be put into perspective by the fact that the dollar cost 11.25 kronor as recently as a month ago.
Handelsbanken sees several underlying reasons in a market update, partly because President Donald Trump's threats of tariffs have not been as severe as predicted before the inauguration on January 20, and partly because the market sees the Swedish and Norwegian krona as undervalued.
"Above all, the outlook for economic growth in Sweden and Norway over the next few years looks significantly better than in many other countries," writes Handelsbanken.
Something that could contribute to further weakening the dollar would be if US inflation comes down and the central bank Federal Reserve raises its interest rates. However, the latest inflation figure from the US showed no such signs, and Handelsbanken does not believe in an immediate improvement.
For the second quarter, they instead believe that the dollar will be at 10.87 kronor and at the turn of the year at 10.77 kronor.
"At the same time, the Fed has taken a cautious stance, and we expect the next interest rate cut to come first in June. That speaks in favor of continued resilience in the dollar," writes Handelsbanken.
