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Swedish Kronor drops in value again (27/11/2012)

“This indicator level clearly signals negative" ..

byke
post 28.Nov.2012, 12:42 AM
Post #1
Location: Europe
Joined: 28.Oct.2008

Not a good sign reflecting the economy for Sweden.

QUOTE
“This indicator level clearly signals negative year-on- year growth,”


QUOTE
The consumer confidence index fell to minus 7.4 from minus 2.9 the previous month, the Stockholm-based research institute said today.


QUOTE
The reports suggest that “economic activity is substantially weaker than normal,”

http://www.businessweek.com/news/2012-11-2...stockholm-mover
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Gordy
post 28.Nov.2012, 07:30 AM
Post #2
Location: Skåne
Joined: 1.Oct.2005

The krona has been overvalued for over a year now, any weakening will be good news for exporters who have been shedding jobs by the bucket load in the last few months.
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Yorkshireman
post 28.Nov.2012, 10:00 AM
Post #3
Joined: 22.Nov.2011

No surprise there, currencies shift ... and just a reminder of the uncertainty in the economy, something that was stated very clearly by the Government way back in September when their 2013 budget proposal was released:

Risk of a weaker outlook continues to dominate

The assessment of the economic outlook remains extremely uncertain, mainly because of the continued unpredictability of the European debt crisis. There is a risk of problems in the crisis countries exerting a greater influence on economies with healthy government finances that have managed relatively well until now. There is also a risk of weaker than expected growth in the United States. Assessments of unemployment and the effect of the exchange rate on the economy may also prove over-optimistic. By the same token, the Swedish economy may begin to recover earlier and recovery may prove stronger than assumed in the forecast.
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Hisingen
post 28.Nov.2012, 01:30 PM
Post #4
Location: Västra Götaland
Joined: 5.Jul.2012

Just for the sake of comparison, here is the fate of the Krona over 2012 against the dollar, the pound and the euro.

Attached Image
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organic225
post 28.Nov.2012, 01:59 PM
Post #5
Joined: 7.Apr.2012

QUOTE (byke @ 27.Nov.2012, 11:42 PM) *
Not a good sign reflecting the economy for Sweden.. http://www.businessweek.com/news/2012-11-2...stockholm-mover

Well, I'll focus on the silver lining here and say that I'm thankful that my dollars may gain some more value with respect to the krona. The USD/SEK exchange rate is dreadful; ten years ago, it was as high as 11 kronor per dollar, and now it's only 6.7 kronor per dollar. I hope it at least weakens to 8:1.
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Hisingen
post 28.Nov.2012, 02:58 PM
Post #6
Location: Västra Götaland
Joined: 5.Jul.2012

It all boils down to which currency you view as most important.
When I came to Sweden in '60 the pound was 14,50 then in the early 70's it was down to 6,25, and now it is 10,70 and 'relatively' stable at that as you can see, since July at least.
But after all - it's only money - or so auctioneers will tell us.
One might say that the krona is strong against your dollar, - or turn it round to say that the dollar has become weak. The curve for this year does indicate changes. So - if you are betting your bottom dollar - - - - - - -
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wondering
post 28.Nov.2012, 03:10 PM
Post #7
Joined: 3.Oct.2011

All I want to point out is that all major currencies have had devaluations over past several years.

The only reason why the devaluation has not been much larger for the dollar, euro etc is that China and other countries hold large foreign reserves in dollars.

http://en.mercopress.com/2011/04/15/china-...-convertibility

Yup 3 trillion dollars . Which is why the dollar's value was kept stable to a certain point. The same goes for the other major currencies.

While byke is right to point out that the kronor is losing value it really is still not something to worry that much about. Sure it probably is a bit more than it should be but this is because a lot of foreign investors have thought of Sweden as a safe haven and so have moved their money here.
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organic225
post 28.Nov.2012, 03:22 PM
Post #8
Joined: 7.Apr.2012

No currency is truly "safe", although some like the krona are currently safer bets than some of the others. To my knowledge, every currency in the world is fiat currency. In other words, there is nothing backing it except the general confidence in the system. Backing currency with gold forces restraint on the printing of new money, as there must be enough gold to back up the new currency.
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Mib
post 28.Nov.2012, 04:11 PM
Post #9
Joined: 7.Jul.2006

When I cameover in 2006, the Kronor was hovering around 14kr to each £1. The main reason was the credit fuelled British economy. It now hovers around between 10,5 and 11 now that the British economy is in a pickle. However, when the British economy picks up again, it will strengthen their currency and the Kronor will be weaker. It' based on confidence, interest rate levels and many other factors. The Kronor is based on other countrys' weaknesses rather than its strengths...although of course that is a factor. But then the Japanese Yen has massively strengthened since the credit crunch, but their economy is weak and has been for over a decade...hence the financial woes of Sony,Sharp and others... helped by Tsunamis, Thai floods and bad management.

So...a weakening of the Kronor is good news for a country that is massively export driven and not so good for the expats who like to buy things from Amazon and others outside Sweden. However, Sweden has so far coped reasonably well with a strong Kronor, even dipping below 10kr for a very short time. But now the EU economy is weakening further and faster...then it's starting to hurt...just like it did in 2008 when Sweden suffered quicker than most, but recovered quicker
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oddsock
post 4.Dec.2012, 02:16 PM
Post #10
Joined: 19.Dec.2008

The fall of the pound is mostly to do with the Bank of England printing money like there's no tomorrow.
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oddsock
post 4.Dec.2012, 02:19 PM
Post #11
Joined: 19.Dec.2008

And Sweden didn't recover in 2008 "quicker" than other countries, they just postponed the recession by lowering taxes and piling on private debt, led by Anders Borg, who seems to still think it's the 1980s. A bit of smoke and mirrors.

The Calvanist Germans don't believe in smoke and mirrors like quantative easing though. The believe in financial tough medicine. A slow deleveraging of the Eurozone.

Only in 10 years from now will you know who was right.
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Mib
post 5.Dec.2012, 12:04 AM
Post #12
Joined: 7.Jul.2006

Wow...Sweden has postponed the recession, yet no other country has managed to do the same...Borg must be incredible...smile.gif not even the low unemployment rate and reasoable economy in Netherlands could manage that...I mean for Borg to have achieved a miracle despite a very strong currency, higher interest rates in comparison to the EU, UK etc and for an export driven country to have not been hit harder due to external factors. And of course, stoking the fires by introducing a minimum 15% deposit for borrowing to buy a home and of course, banks are literally throwing free/cheap money at people, despite having to raise funds from the international market, which offers fantastic deals to Swedes only...oh and don't forget that the current Government is foing everything it can to be voted out and leave s black hole for the next left wing...SD coaltion. Of course...Sweden is such a big fish in the pond, it can avoid future Greek exits etc, by continuing to blind us all. It's probably good that the world is die to end on Dec 21st! smile.gif but we're all in denial...save us smile.gif
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