Swedish Krona Falls on Growth & Interest Rates Outlook

The Swedish krona today fell against all its most-traded peers as the government slashed its growth forecast for the nation’s economy, spurring speculation that the central bank won’t be able to increase lending rates.

Sweden cut its growth forecast for this year from 4.6 percent to 4.1 percent. The forecast for the next year was slashed from 3.8 percent to 1.3 percent. The Riksbank will announce its decision on interest rates after the meeting on September 7.

The OMX Stockholm 30 Index, the nation’s key stock index, dropped 0.4 percent. The index has declined 13 percent this month. Arne Lohmann Rasmussen, chief foreign-exchange analyst at Danske Bank A/S said that pension funds may sell the krona after the decline of stocks, making an “excellent buying opportunity”.

USD/SEK climbed from 6.2926 to 6.3524 as of 21:57 GMT today. The currency pair reached the high of 6.3883 during the trading session.

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