Krona, Krone Rise on China GDP - Nordics Eyeing Eurozone CPI Data
TALKING POINTS – SWEDISH KRONA, NORWEGIAN KRONE, GERMAN FINANCE MINISTER, CHINA GDP
- SEK and NOK eyeing German finance minister econ forecasts
- Krona and Krone jump on better-than-expected Chinese GDP
- Why does a European slowdown make Riksbank officials nervous?
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The economic docket for Norway and Sweden remains light for today. So as with yesterday – and likely for the rest of the week – the Swedish Krona and Norwegian Krone’s price movement will likely be dictated by external event risk. Yesterday’s mixed German survey reports and US industrial data did not elicit a strong reaction from NOK or SEK, though the former did appear to induce marginally more volatility.
Later today, Germany’s Finance Minister, Olaf Scholz will be speaking in Berlin and providing an update on the economic outlook. Riksbank Deputy Governor Martin Floden himself recently noted that weakening growth in Germany has made policymakers nervous. Due to the unique political economy of EU-Nordic relations, changes in European demand have a significant impact on the Swedish economy’s performance.
NOK and SEK traders will also be keeping an eye on upcoming Eurozone CPI data. This comes as the German economy is slowing and PMI surveys are repeatedly illustrating souring sentiment. Furthermore, the escalation of US-EU trade tensions will leave the export-heavy DAX vulnerable as underlying momentum is showing signs of weakness. Another cross-Atlantic trade spat would further muddy an already-gloomy outlook for the region, a growing concern for investors and policymakers alike.
During APAC trading hours, the Norwegian Krone and Swedish Krona received a boost from better-than-expected Chinese GDP data. The uplift in sentiment sent cycle-sensitive assets higher at the expense of anti-risk havens like the US Dollar and Japanese Yen. What this also illustrates is the sensitive nature of NOK and SEK and underpins their status as export-driven currencies that frequently respond to changes in global sentiment.
CHART OF THE DAY: SWEDISH KRONA, NORWEGIAN KRONE INDICES
NOK index composition: USD, GBP, JPY, EUR
SEK index composition: USD, GBP, JPY, EUR
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--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com
To contact Dimitri, use the comments section below or @ZabelinDimitri on Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.