The Swedish krona is getting smashed after some disappointing inflation data.
The currency is down by 1.9% at 8.8172 per dollar following data showing that consumer prices in Sweden ticked up by only 0.9% year-over-year in September.
That’s below economists’ expectations of 1.2%, and way below Riksbank’s 2.0% target.
“Sweden’s inflation rate has come in below market (and the Riksbank’s) expectations for the last two months, which no doubt will reignite talks of further easing from the Riksbank. Although the central bank may be disappointed with the latest drop in price pressures, we still can’t see why it would cut rates again,” argued HSBC economist James Pomeroy in a note.
“There remains the possibility of extending the QE programme, but with the currency already 4-5% weaker than in the spring, it seems hard to justify, especially if inflation is being driven by greater competition via technology,” he added.
Tuesday’s sell off has the krona at its lowest level since April 2015, and is nearing levels previously seen in Q4 2002.