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The UK has been infected by “Nordic noir” ever since Danish detective series The Killing first hit TV screens.
It seems the gloom extends to the currency markets.
The pound this week fell below 9.7 Swedish krona – its lowest level since the UK fled the European Exchange Rate Mechanism in 1992.
The recent leg down is about sterling weakness, after traders were surprised by the dovish stance of outgoing governor Sir Mervyn King in the latest Bank of England meeting minutes.
But longer term, it is a tale of Scandinavian strength.
Along with its Norwegian peer, the krona is rewarded for relative economic fortitude, the result, says Bank of America, of sturdy fiscal and current account balances and a favourable mix of trading partners.
Anders Borg, Sweden’s finance minister, this month told businesses that resistance was futile and they must accept the krona would be strong for a “couple of years”. The central bank has just resisted the temptation to cut rates to weaken the krona.
This has helped the two-year bond yield spread with the UK to widen sharply to 85 basis points, making holding the krona more attractive.
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