Kroner Jumps as Risk Taking Returns to Marketplace
May 11th, 2010 Posted in Analyst Picks
Name: Dan
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Following weekend news that Greece’s financial bailout package has been approved, the Scandinavian Kroner jumped against the Euro as risk appetite began to return to the marketplace. The Swedish and Norwegian currencies were fairing particularly poorly last week during the height of Greek debt worries. With the passage of the bailout plan, both were able to stage a rally in recent days. Since trading resumed this week, the EUR/SEK has dropped from 9.7422 to its current level of 9.6232. The EUR/NOK has seen a similar trend in the same amount of time, dropping from 7.9434 to its current level of 7.8370.
Scandinavian currency traders will want to take note that the risk taking currently occurring in the market may turn out to be temporary. Investors are already voicing doubts about whether the bailout package will be enough to fully contain Greece’s debt crisis. In addition, deficit worries in Spain and Portugal have the potential to weigh down on investor confidence. This could all translate into a downward correction for the Kroner.
This week, traders will want to pay careful attention to a number of U.S. news events, including the latest unemployment claims and the Core Retail Sales report, set to be released on Thursday and Friday respectively. Should either report come in above expectations, the greenback will likely receive a boost as a result. This could lead to a drop in value for the Scandinavian currencies if risk taking subsides.
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Tags: core retail sales, Kroner, NOK, SEK, Unemployment
