Grupp: Huvudforum
Sweden: First of a Series of Rate Hikes Coming This Friday
How much further the Swedish crown might rise over 2006 will depend largely on the interest rate differential between the Riksbank and the ECB, and in particular on relative changes in their inflation-adjusted interest rates. As of December, the real (headline inflation adjusted) repo rate in Sweden stood at 0.6% - the comparable rate in the Euro-zone was a negligible 0.05%. If Sweden's tightening outpaces that of the Euro-zone while its inflation rate remains relatively subdued - both of which seem likely for now - the crown will climb still higher. Key to watch will be the tone of the Riskbank's announcement on Friday, and that of the ECB at its next meeting on February 2.