The Swedish krona rose after retail sales rose unexpectedly in April, causing bets that interest rates will be reduced in July to fizzle out.
The krona rose up to 0.4 percent to trade at 9.0258 against the euro and up 0.4 percent against the US dollar, making the best performer today among major currencies.
Retail sales in Sweden accelerated 0.3 percent in April from a month ago, reported Statistics Sweden on Monday. This exceeded the average estimate of a 0.5 percent decline in a Bloomberg survey of economists. The sales rose 5.7 percent from a year earlier, lowering speculation that the central bank may cut the repo/main rate this July. A high unemployment rate and low demand has prevented inflation from advancing further.
“Although we expect a positive trend throughout 2014, growth numbers should moderate somewhat already from next month,” Andreas Wallstroem, a Stockholm-based economist at Nordea Bank AB said.
The country’s policymakers retained the repo rate at 0.75 percent last month, and are expected to announce the new figure on July 3.
In a separate report, the Brazilian real halted its gains and fell to its weakest level in three weeks after the country posted its biggest weekly trade deficit in nearly four months.
The real plunged nearly 0.1 percent to trade at 2.2242 per dollar in mid-afternoon in Sao Paulo, the lowest level since May 6. Brazil recorded a trade deficit of $1.1 billion in the week ending May 25, down from the previous week’s $563 million surplus. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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