{"id":19998,"date":"2011-03-08T12:01:12","date_gmt":"2011-03-08T17:01:12","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=19998"},"modified":"2011-03-08T12:01:12","modified_gmt":"2011-03-08T17:01:12","slug":"stockholm-or-bust-swedens-powerhouse-economy","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2011\/03\/08\/stockholm-or-bust-swedens-powerhouse-economy\/","title":{"rendered":"Stockholm or Bust: Sweden\u2019s Powerhouse Economy"},"content":{"rendered":"

By Greg Holden<\/strong><\/p>\n

A variety of articles have analyzed the rising strength of the Swedish krona (SEK)<\/a> to point of exhaustion. A key aspect emphasized, though \u2013 as is usual in this global economic environment \u2013 is caution. But is caution warranted when it comes to Sweden?<\/p>\n

Let\u2019s evaluate the claim.<\/p>\n

Sweden\u2019s krona is rising at a more-than-healthy rate. The USD\/SEK<\/a> has moved from 8.1311 last June to as low as 6.3614 today. The EUR\/SEK<\/a> witnessed a similar price movement from as high as 10.2695 in November 2009 to today\u2019s current price of 8.8760.<\/p>\n

The fear with this rising strength comes when viewing Sweden\u2019s concurrent economic growth, which rose 7.3% year-on-year in Q4 2010. Analysts have been forecasting a gouging effect<\/a> from the rising SEK, which will eventually pull down on Swedish exports and dampening growth.<\/p>\n

This claim was made starting from late-2010, but has yet to bear any signs of occurring as expected.<\/p>\n

In fact, Sweden\u2019s economic growth appears dissonant with what is happening elsewhere in the world. As the Wall Street Journal recently pointed out<\/a>, Sweden doesn\u2019t face many of the same problems as other global economies. Sweden faces no sovereign debt crisis like Europe; no deflationary fears like Japan; no unemployment or budgetary problems like the United States; nor fears of an over-strengthened currency by its central bank, like Switzerland.<\/p>\n

Indeed, the Riksbank actually raised interest rates to 1.5% in 2010, with an expectation to reach 3.0% by Dec. 2011. Swedish Finance Minister Anders Borg also told reporters<\/a> lately that Sweden\u2019s government is expecting growth of 4.8% in 2011, an upward adjustment from the previous expectation of 3.7%.<\/p>\n

It appears that an apt metaphor for Sweden\u2019s trajectory is to view all global economies as being in a race to normalcy, with Sweden finishing first in Q4 2010. The prize is unprecedented growth lasting as long as the other global economies continue the race.<\/p>\n

The next logical question to ask, in regards to the caution urged by speculators, then, is \u201cHow close are the other economies to finishing?\u201d<\/p>\n

Forex Market Analysis provided by ForexYard. <\/a><\/strong><\/em>
\n<\/a><\/strong><\/em><\/p>\n

\u00a9 2006 by FxYard Ltd<\/p>\n

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.<\/p>\n","protected":false},"excerpt":{"rendered":"

A variety of articles have analyzed the rising strength of the Swedish krona (SEK) to point of exhaustion. A key aspect emphasized, though \u2013 as is usual in this global economic environment \u2013 is caution. But is caution warranted when it comes to Sweden?<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-19998","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/19998","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=19998"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/19998\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=19998"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=19998"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=19998"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}