Swedish krona falls to 16-year low against the US dollar

On Tuesday, the Swedish krona recorded its worst rate of inflation against the US dollar in 16 years, which caused the Swedish central bank to fear not being able to quickly bring down the negative pension rate in Sweden .

Sweden took a tough defeat when Statistics Sweden announced that the Swedish inflation rate (IPIF) had fallen to 2.2% in January, from 2.2% a month earlier – well below expectations. Central Bank forecasts, which projected a rate of 2.4%.

The crown immediately bowed to the news, trading at noon at 10.41 against 10.00 and 10.61 against the euro, as investors then saw the signal that Sweden will not be able to. increase its borrowing costs so early.

"This is a reaction to the fact that it will be very difficult for the Central Bank to raise the key rate this fall," said Annika Winsth, chief economist at Nordea, at the Swedish daily Dagens Nyheter.

Inflation data that followed slowed retail sales in January and undermined Swedish consumer confidence.

"We are in a spiral in which all the benefits we had when Sweden was doing better than other countries were removed, then we have inflation below expectations and a central bank signaling that [a repo rate increase] will take a moment […] and now the market thinks it will take even longer, "said Winsth.