Expert about the strong crown: « Very unusual »
The latest shot upwards for the crown comes from Donald Trump starting to reverse from the US’s rock hard customs policy. It arouses global willingness to invest – something that benefits Kronan, which is sensitive to growth, according to Amanda Sundström, currency strategist at SEB.
But the crown has has gone strong since the turn of the year and is now at 9.78 against the dollar, which is a reinforcement of 13.2 percent. According to Amanda Sundström, this may be related to Sweden’s relatively large defense industry – especially at a time when the war in Ukraine causes European countries to invest in upgrading.
Combined with strong government finances, which have enabled the government to both invest and reduce taxes, it has increased the desire to invest in the krona.
– I think it attracts interest in international markets.
Investors also generally want to reduce US holdings and invest more in Europe.
– Then Sweden may be seen as an alternative for those who want to get more European exposure.
For the private economy the strong krona means an extended travel box.
– You get a little more purchasing power if you go to Spain or Italy now during the summer for example.
It can also lead to lower food prices because many foods in Swedish stores are imported from abroad.
But it also has a negative effect. Swedes generally have much of their savings and pension money invested abroad.
– When the crown is strengthened, they become a little less worthy, says Amanda Sundström.
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