The Swedish krona (SEK) advanced today for the first time in five days after investors appeared to be seeking out higher yielding assets. This recent surge in risk appetite was brought about following several positive economic reports out of the region, soft economic data out of the United States, Japan and Switzerland, and from a general stabilizing effect wrought from oil prices hovering near $100.
The Norwegian krone ( NOK ) experienced similar results this morning and afternoon as traders found reason to buy into the commodity-linked currency once oil prices found stability around $100 a barrel.
Sweden's krona made a 1.2% advance versus the US dollar with a current price near 6.2410 whereas the NOK moved from its recent low of 5.5364 to its current value of 5.4429.
Analysts at Bloomberg have noted that this week's market environment brought with it a surprising level of stability relative to last week, and market fundamentals seem to support the notion that traders are seeking higher yields.
The US dollar met resistance at the start of this week following last week's rapid flight to safety which shoved the EUR/USD strongly towards 1.42 from its recent high of 1.49.
The result has been for forex traders involved in Scandinavian trading to move en masse towards to the kroner of the region, with Denmark's krone (DKK) gaining the least of the three versus the UDS; a paltry 0.3% since Friday.
Credit growth in the Norway has also helped fuel the recent return of strength for the Scandinavian kroner due to its implications for interest rate hikes later this month.
While Sweden's Riksbank is set to raise rates at each meeting this year, Norges Bank has signaled it may hold off on rate increases until the second half of 2011. But a 6.3% surge in annualized credit growth, reported recently, has begun to push housing prices rapidly higher in Norway and could force a reevaluation in monetary policy at its next meeting, according to Bloomberg.