Tuesday, July 10, 2007

Swedish Krona

Bloomberg Today:

Swedish Krona Gains as Inflation Unexpectedly Quickens in June

July 10 (Bloomberg) -- Sweden's krona rose, snapping two days of declines, after a report showing inflation unexpectedly accelerated in June reinforced the central bank's argument last month for quickening the pace of interest-rate increases.

The krona jumped as inflation, excluding mortgage payments, subsidies and indirect taxes, accelerated to 1 percent in June from 0.9 percent in May, the national statistics agency in Sweden said today. Inflation was expected to be unchanged. The bank boosted the main rate a quarter-point to 3.5 percent last month and said it may raise it to ``around'' 4 percent by year-end.

``The figures confirm recent hawkish signals from the Riksbank and hence support further rate rises,'' said Mari Vattekar Markman, a currency analyst at DnB NOR, in a note to clients. ``Swedish industrial production and new manufacturing orders for May came out strong as well.''

Against the euro, the krona rose as much as 0.4 percent to 9.1565 and traded at 9.1724 by 11 a.m. in Stockholm, from 9.1933 yesterday. The krona is the top performer of the 10 most-actively traded currencies this month, advancing 0.9 percent.

Swedish industrial production rose 0.4 percent in May from April and 3.6 percent from a year earlier, the statistics office said today, as export orders grew.

Elsewhere, Norway's krone fell the most in more than a week after Statistics Norway said inflation unexpectedly slowed to 1.3 percent in June from 1.4 percent. Economists surveyed expected inflation to accelerate to 1.5 percent.

The krone slid 0.4 percent to 7.9543 per euro in Oslo, from 9.9247 late yesterday. It was the second-best performing major currency monitored by Bloomberg in June after the New Zealand dollar.

In the bond market, the yield on the 5.5 percent Norwegian bond due May 2009 was little changed at 5.31 percent. The yield on the Swedish 4 percent note due December 2009 rose 2 basis points to 4.45 percent. Bond yields move inversely to prices.

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