"It's hard for the krona to thrive in an environment where the dollar is strong," SEB's chief economist, Jens Magnusson, told the TT newswire. The value of the krona has plummeted in value compared with the dollar this autumn, due for the most part to rising long-term interest rates in the US. The last time the value of the krona was this weak against the dollar was a year ago, in November 2023.
"We've had to change our view of the krona a bit during the autumn as long-term interest rates in the US have gone up," Magnusson said. "At the moment there's a very strong link between interest rates and the exchange rate."
"It's like usual, the krona struggles when the dollar is strong and the euro is weak," Magnusson said. "So it's not a huge surprise given the situation."
"We believe the krona is undervalued and in one or two years' time we'll probably see it strengthening," Magnusson said. "But we'll probably see rates of over 10 kronor against the dollar and 11 kronor against the euro for this whole forecast period a few years into the future."
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