I am one of the guilty

The major Norwegian bank DNB is flagging that the Swedish krona is overrated and will lose value against both the US dollar and the euro in the coming months. The Swedish krona strengthened after the US central bank, the Federal Reserve (FED), cut the policy rate by 50 points on Wednesday. After the sharp weakening of the krona in recent years, it is basically unchanged since the turn of the year against the euro and the US dollar. But anyone hoping for a clear strengthening of the krona in the coming year will be disappointed, according to DNB.

Within a 12-month period, DNB believes that the Swedish krona will weaken by a further 4% against the euro. According to the same bank, the US dollar will also become more expensive for the Swedes. The background to the weak Swedish krona exchange rate is, among other things, a continuous savings surplus in Sweden, which is used, among other things, for investments in securities denominated in euros and dollars. In the short term, the financial flows are absolutely decisive for the krona exchange rate, in contrast to the general opinion that it is the commercial flows according to DNB's chief economist Ulf Andersson.

DNB is not the only player predicting a gloomy future for the Swedish krona, Nordea also predicts a weakened krona exchange rate, although Nordea sees a glimmer of light in that Sweden is now entering a period of lower policy rates, which is usually better for the krona.

Our little family has all our savings on Wall Street, so we are very complicit in the possibly dreary future that awaits the Swedish krona.