The euro rallied Wednesday. What about the Swedish crown?
The euro surged forward against several European currencies during today’s session. It jumped by 1.05% versus the Swedish crown, exchanging hands at 11.426. The currency remains on track for its biggest one-day gain against the crown since early March.
The Swedish currency plunged low on Wednesday. The country’s central bank decided to take a less aggressive stance on its policy tightening. This news surprised forex markets as investors expected the bank to continue being hawkish. However, Sweden’s central bank hiked its interest rate by only half a percentage point, reaching 3.50%. The officials also stated that they might continue raising rates at their next meetings in June or in September. But the hikes might be lower.
The U.S. dollar had shaved off 0.7% versus the crown over the last several sessions. But after the Riksbank’s decision, the greenback firmed, trading at 10.305 crowns.
Meanwhile, the common currency recovered some of its losses from the previous session. On Tuesday, traders’ concerns about the U.S. banking sector supported the safe-haven currencies, pushing the euro lower. Kenneth Broux, the head of corporate research for FX and rates at Societe Generale, noted that the rate differential might cause the euro to decline further. However, investors expect the European Central Bank to hike interest rates at its meeting. If that proves true, the common currency might surge forward instead of dropping lower.
The euro rallied broadly on Wednesday. It climbed up by 0.57% versus the dollar, exchanging hands at $1.1038 at last. At the same time, the British pound gained 0.5% to $1.2474. But the Norwegian crown plummeted. It lost 0.16% against the euro. The latter traded at 11.747 crowns, hitting a three-year peak.
How is the U.S. dollar faring?
The dollar index dropped by 0.42% at 101.38 against the basket of six major currencies after gaining 0.5% in the previous session. The greenback soared thanks to its safe-haven status yesterday.
On Tuesday, shares of First Republic Bank plummeted by almost 50%. The bank reported that its deposits decreased by more than $100 billion in this quarter. People fear trusting their money to banks after the recent problems in the banking sector. Despite that, analysts seem optimistic. They pointed out that other regional banks stayed strong thus far.
The Japanese yen climbed up today. The U.S. dollar dropped by 0.3% versus the yen, trading at 133.27. Meanwhile, the Australian dollar tumbled down to $0.65955, hitting a six-week low. New data showed that in Australia, inflation dropped from 33-year peaks in the first quarter of 2023.
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