A significant factor is the growing concern about the American economy, with shaky stock markets and President Trump's announced tariffs.
Donald Trump has said that a downturn or even a recession in the economy is possible, and that was not what people had expected when he took office. They had thought that his policies would be growth-promoting, says Jens Magnusson at SEB.
Another piece of the puzzle is that two currencies are moving against each other, and the krona and euro have been strengthened by large investments in defense and infrastructure. Monetary policy also plays a role, as the interest rate level affects how attractive it is to invest.
Magnusson also mentions trend-following funds that amplify the effect. These are controlled by robot trading and algorithms – and are now buying kronor and selling dollars.
It's difficult to predict what the future holds for the krona and dollar, according to Magnusson.
It has gone very fast now. We can't assume that this is a lasting trend. There may be a counter-reaction in the near future if Trump's tariff policy becomes more predictable and the market calms down.
But that's not what he's signaling right now, notes Magnusson.
