The Euro to Swedish Krona (EUR/SEK) exchange rate declined significantly on Tuesday afternoon.
With the situation in Greece reaching boiling point, and with increased bets on a Greek exit from the Eurozone, the single currency softened versus the majority of its most traded currency rivals. The declination was aided by a disappointing German economic sentiment publication.
The Swedish Krona, meanwhile, strengthened in response to positive labour market data. Adding fuel to the Krona advance was a statement from Riksbank Governor Stefan Ingves, who said inflation was headed towards the central bank’s target.
The Euro to Swedish Krona (EUR/SEK) exchange rate is currently trending in the region of 9.2874.
Euro (EUR) Exchange Rate Trending Lower on Geopolitics
Geopolitical tensions in Greece have become such a melting pot of factors that it seems almost inevitable that the nation will eventually leave the Eurozone, whether by force or on a voluntary basis. Athens has had to pool all of the spare cash from local governments in order to stay afloat until they receive aid which is seemingly increasingly unlikely to ever come.
In an attempt to capitalise on the cash-strapped nation’s desperation, Russian-based gas company Gazprom have sought a deal to use Greece as a way to pipe gas into central Europe. However, a deal could be a very long way off and will do Greece no favours in the long-run. Gazprom won’t be able to build a pipeline without the approval of the European Union and Turkey.
‘Gazprom can’t proceed with the project if it ends in Greece and starts in Greece,’ said Kornilov, a senior oil and gas analyst at Alfa-Bank in Moscow.
The Euro to Swedish Krona (EUR/SEK) exchange rate dropped to a low today of 9.2836.
Swedish Krona (SEK) Exchange Rate Strengthens as Riksbank Officials see Inflationary Turnaround
The Krona advanced versus the majority of its most traded currency rivals on Tuesday after labour data printed positively. Unemployment Rate was forecast to drop from 8.4% to 8.2%, but the actual result fell to 8.0% in March.
‘We note that Sweden reported a sharper than expected decline in unemployment, and this lent support to the Krona. However, central bank still seems more concerned about deflation than the real economy itself,’ said Brown Brothers Harriman Team.
Additional Krona appreciation can be attributed to a speech from Riksbank Governor Stefan Ingves who stated; ‘We seem to have turned around and things seem to be moving in the right direction,’ Still, ‘given that inflation has been low for quite a while that doesn’t mean that we’re comfortable where we are,’ he said.
Euro to Swedish Krona (EUR/SEK) Exchange Rate Forecast to Hold Losses
Given the many, varied factors contributing to Greece’s economic crisis, and with a lack of domestic data to provoke changes, the Euro to Swedish Krona (EUR/SEK) exchange rate is likely to hold losses for the remainder of the European session on Tuesday.
Wednesday may see heightened EUR/SEK volatility with Eurozone Consumer Confidence data due for publication. However, the situation in Greece will dominate trader focus.
The Euro to Swedish Krona (EUR/SEK) exchange rate climbed to a high of 9.3542.