UK markets open in 1 hour 5 minutes
  • NIKKEI 225

    -180.63 (-0.65%)

    +384.94 (+1.96%)

    -0.13 (-0.14%)

    -12.30 (-0.68%)
  • DOW

    +535.11 (+1.63%)

    +1,310.50 (+6.94%)
  • CMC Crypto 200

    +48.85 (+9.20%)
  • ^IXIC

    +360.88 (+2.89%)
  • ^FTAS

    +21.29 (+0.52%)

Norwegian and Swedish crowns seen appreciating in second half of year - Reuters poll

·1-min read

STOCKHOLM (Reuters) - The Norwegian and Swedish currencies are likely to appreciate in the second half of the year, as the Russia-Ukraine conflict and broadening inflationary pressures have redrawn the map for the Scandinavian currencies, a Reuters poll showed on Friday.

The pandemic and the Ukraine war have also led to transport bottlenecks and shortages of key industrial components, pushing prices up across the board and prompting central banks to tighten monetary policy.

May inflation in Norway and Sweden accelerated to 5.7% and 7.2%, respectively.

Central banks in both countries responded by hiking their benchmark interest rates by 50 basis points in June, the biggest hike for nearly two decades.

The Norwegian crown is currently dictated by developments on the stock market, said Ole Haakon Eek-Nielsen, head of analysis at Nordea Norway.

"We are a bit concerned because we note that the central bank wants to tighten and that means all thing equal that shares aren't to go up. So, shares down and interest rates up, that is not very positive for the crown and as long as that scenario holds there is a case for a weaker crown," he said.

The global markets turmoil and lacklustre equities have weakened the Swedish crown substantially this year.

"With worries in the markets about stagflation and/or recession we believe that risk appetite will remain muted during summer and thus Scandies will have a hard time trading on the strong side," SEB wrote in a research note.

(For other stories from the July Reuters foreign exchange poll:)

(Reporting by Johan Ahlander and Victoria Klesty; Polling by Sujith Pai, Aditi Verma and Sarupya Ganguly; Editing by Sherry Jacob-Phillips)

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting