Pound and dollar hit new krona lows

The international credit crisis has pushed the US dollar and the British pound to new lows against the Swedish krona. The pound was on Wednesday threatening to fall below the 12 kronor mark for the second time in a week, and the dollar was hovering just a fraction above a historically low level of 6 kronor.

Sweden’s relatively robust growth, low unemployment and sound public finances are being credited for the strength of the krona against the American and British currencies.

“This is essentially more of a pound and dollar story than it is a krona story,” Johan Javeus, currency analyst at bank SEB told The Local.

The US currency is being pounded due to the credit crunch and the economic uncertainty that has followed from the difficulties in the financial system. The pound is performing poorly against many international currencies due to the UK’s reliance on financial services and “not-so-solid fundamentals,” particularly its current account deficit, said Javeus.

The last time the pound fell below 12 kronor was in 1997; the dollar has not been as low against the krona since 1992. The strength of the krona is good news for Swedes investing in the US or UK and for those travelling across the Atlantic or North Sea with kronor in their pockets, although it is bad news for Swedish exporters, who will find their products more costly on the vital US market.

Yet while the krona is performing well against the dollar and pound, the euro exchange rate has been telling a different story. On Wednesday the euro was fetching 9.39 kronor in Stockholm, close to the highest value in the currency’s existence.

“The krona is certainly weak against the euro. Smaller currencies such as the kronor are being overlooked by investors, despite the strong fundamentals” said Javeus.

Further falls are expected for the dollar and pound against the Swedish currency over the next few months.

“The dollar could be down to about 5kr80 by the summer, but again this is more a reflection on the dollar than the kronor,” said Javeus.

“Basically it’s the same story for the pound – we see more weakness there,” he added.

The krona could also see rises against the euro if the Swedish government’s privatization process sees Absolut Vodka maker Vin&Sprit sold to a foreign company, although overall “the outlook is stable for the krona rate against the euro,” Javeus said.


Swedes don’t want to join the euro – now or ever

A large majority of Swedes don’t want to join the eurozone and most predict the country will never adopt the EU’s common currency‚ according to a new survey.

Swedes don't want to join the euro – now or ever
Euros? Nej tack! Photo: Jens Meyer/AP

Sixty-eight percent of Swedes are opposed to replacing the krona with the euro, a new Eurobarometer poll shows. 

The survey was carried out in the seven countries that are not yet part of the single currency but have pledged to join at some point. These are: Czech Republic, Bulgaria, Poland, Croatia, Hungary, Romania and Sweden. 

The two other countries outside the eurozone, Denmark and the UK, have each secured exemptions and are not obliged to join, as Europaportalen reports

Thirty percent of respondents in Sweden were “strongly against” adopting the euro. A further 38 percent were “rather against”. Only four percent were strongly in favour of introducing the euro. 

Czechs were even more strongly opposed than Swedes, with 70 percent keen to give the euro a wide berth. 

Poles also want to stay out, whereas Bulgarians, Croats, Hungarians and Romanians would prefer to scrap their domestic currencies. Support for the euro was strongest in Romania, where 66 percent of respondents favour the euro over the leu. 

Despite their overall opposition, a majority of respondents in the seven countries polled said the euro had made a positive impact in the countries that had adopted it. 

Even thought these countries are formally required to join, in practice the decision remains in national hands. And 55 percent of Swedes don’t think the euro will ever become their currency.