The Euro to Swedish Krona (EUR/SEK) exchange rate weakened to its lowest level in two weeks on Wednesday as the Riksbank defied economist forecasts by leaving interest rates unchanged. The Euro to Norwegian Krone (EUR/NOK) exchange rate also softened following the release of strong Norwegian retail sales data.
Euro to Swedish Krona (EUR/SEK) Exchange Rate Fell To a Session Low Of 9.2435
The Swedish Krona advanced strongly to reach a one-month high against the US Dollar and advanced to its best level in two-weeks against the Euro after the Swedish central bank surprised economists by leaving interest rates unchanged at -0.25%.
‘The decision to leave rates unchanged was a surprise. The Krona has appreciated and we expect to maintain its gains for the rest of the day,’ said SEB currency strategist Richard Falkenhall.
The Riksbank left its main repurchase rate at -0.25% which was unexpected by analysts who had been forecasting for a rate cut to -0.4%.
As well as leaving rates unchanged, the bank’s policymakers said that it will increase the bond buying programme currently in place by an extra 40 billion to 50 billion Krona. The Riksbank also said that increases in the repo rate, not expected to begin until the second half of next year, would be slower than previously thought.
‘The expansionary monetary policy is having a positive impact on the Swedish economy and inflation has begun to rise,’ the bank said in a statement.
Euro to Norwegian Krone (EUR/NOK) Exchange Rate Touched a Session Low of 8.3728
Data released by Statistics Norway showed that retail sales in the Scandinavian country increased as expected in March.
According to the data, retail sales, excluding motor vehicle sales, rose a seasonally adjusted 0.3% in March, a figure that was slower than the preceding months increase of 0.9%. The figure matched economist expectations.
On an annual rate, retail sales were shown to have increased by 1% in March, a dip from the 1.7% growth rate recorded in February. Retail sales value increased by 2.7%.
Following the release of the data, the Norwegian Krone spiked higher against the Euro but then quickly retreated to settle in the region of 8.4004.
The Euro was also under pressure as confidence and sentiment reports mostly disappointed. Business confidence increased more than forecast from 0.23 to 0.32 in April.
Consumer confidence fell by -4.6 as forecast. Economic sentiment weakened from 103.9 to 103.7 and industrial sentiment fell from -2.9 to -3.0.