Riksbank prepares intervention – BBH

By FXStreet FXStreet (Guatemala) – Analysts at BBH explained that Sweden’s Riksbank prepares intervention but many countries may look with envy upon Sweden.

Key Quotes:

“Growth last year was probably around 3%, with household consumption rising a little more than 2%. Its current account surplus is 7.5% of GDP. Exports were up by 4.3%. Its budget deficit is around 1% of GDP. Earlier today Sweden reported its manufacturing PMI rose to 56.0 from 54.9 in November. This the highest since March 2014.

The main angst of the Riksbank, Sweden’s central bank, is the persistence of disinflationary conditions. In November, consumer prices were up 0.1% from a year ago. The underlying measure, which is not a core measure (excluding food and/or energy) but is calculated on the basis of fixed rate mortgages stood at 1.0%.

Despite the Riksbank buying government bonds and a negative 35 bp repo rate, the Swedish krona appreciated by 5.5% on trade-weighted basis since early-August. During this period it rose 3% against the euro and Danish krone, 9% against the Norwegian krone and 1.7% against the US dollar.

Central bank officials have tried talking the currency down to little avail. The central bank warned on …read more

Source:: FX Street