Reuters logo
FOREX-Swedish crown hits 6-yr low on Riksbank rate cut, QE; yen gains
February 12, 2015 / 9:42 AM / 3 years ago

FOREX-Swedish crown hits 6-yr low on Riksbank rate cut, QE; yen gains

* Swedish crown dives as Riskbank announces QE, cuts rates

* Yen gains on report BoJ against further stimulus

* Euro steady after Greece meeting ends without agreement

By Jemima Kelly

LONDON, Feb 12 (Reuters) - The Swedish crown hit a six-year low against the dollar on Thursday after the central bank in Stockholm surprised many investors by launching a stimulus programme and cutting interest rates.

The yen surged against the dollar and the euro on a media report that the Bank of Japan sees further monetary stimulus as counter-productive.

The crown fell around 2 percent against the dollar to hit 8.5512 crowns, its weakest since April 2009. Against the euro, it hit a two-month low of 9.6894.

The Riksbank, which by introducing negative rates joins a select club of countries experimenting with a measure rejected by many economists as unfeasible until the financial crisis, also said it stood ready to take further measures at short notice to combat the threat of deflation.

The central bank also said it would soon make purchases of government bonds with maturities from 1 year up to around 5 years for a sum of 10 billion Swedish crowns.

“Clearly they’ve been more aggressive than expected,” said Adam Cole, global head of FX strategy at RBC Capital Markets in London. “It leaves both the threat of more QE and the threat of more rate cuts open..., so it’s hard to be constructive on the currency.”

The euro was steady at $1.1340, despite the failure of euro zone finance ministers to agree with Greece on a way to break the deadlock over the country’s bailout, or even on a joint statement on the next procedural steps.

Though both sides played down the setback, the news poured cold water on optimism sparked after CNBC had reported earlier that an agreement was reached in principle.

“That is going to ... keep the euro very much under pressure,” said Ian Stannard, head of European FX strategy at Morgan Stanley in London.

The yen gained as much as 1.5 percent against the dollar to 118.60 yen before easing a little to 119.48, still up around 0.9 percent on the day. (editing by John Stonestreet)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below