The Euro to Swedish Krona (EUR/SEK) exchange rate fell to its lowest level since March 17 on Tuesday as better-than-forecast data out of Sweden buoyed the Krona and as worries over a Greek default sent the single currency falling.
The Euro to Swedish Krona (EUR/SEK) exchange rate slumped to a session low of 9.2039
Fresh from its Eurovision song contest win, Sweden received more good news on Tuesday.
According to Statistics Sweden, the Scandinavian nation’s producer price inflation increased to its highest level in 8-months in April. The Swedish Producer Price Inflation Index increased 2.4% on a year-on-year basis, a rise that was faster than the preceding month’s increase of 2.3%.
The rise marks the fourth consecutive monthly rise and added to signs that the Swedish economy is improving. On a month-on-month basis, producer prices eased by 0.3%, import prices rose 0.2% and export prices fell 0.3%.
Economic data released this week is likely to add more strength the Krona as Wednesday’s business confidence report is expected to show signs of improvement. The most important data however will be released on Friday and is expected to show that the Swedish economy expanded in the first quarter of 2015.
Greece Worries Weaken Euro (EUR) Exchange Rate
Fears that Greece will default on its debt repayments to the International Monetary Fund (IMF) were weighing heavily upon the Euro. Over the weekend, Greek Interior Minister Nikos Voutsis warned that the country would not be able to make the payment. Because of the worries, the Euro fell sharply against the Pound Sterling (GBP), US Dollar (USD) and other major peers.
‘The Greek government will need some form of deal in order to release further funds if it is to avoid missing payments to the IMF in June. Whether Greek PM Tsipras can negotiate a deal that is acceptable to enough MPs of his party isn’t clear and markets are once again, very edgy. Across the Mediterranean, there have been heavy losses by Spain’s ruling Popular Party to anti-austerity parties in regional and local elections. Peripheral European government bond spreads are wider though not drastically, but the Euro is much weaker,’ said Kit Juckes, chief currency strategist at Societe Generale.
A deal between Athens and its European creditors to release vitally needed bailout funds is unlikely to yield results as both sides continue to blame the other for the lack of progress being made. Ministers are meeting in Brussels again today but the chance of a breakthrough being reached is slim.