Bloomberg News

Swedish Krona Advances Most in Four Weeks on Greek Aid Optimism

February 21, 2012

Feb. 20 (Bloomberg) -- Sweden’s krona rose the most in four weeks against the dollar as optimism European finance ministers will settle their differences over a Greek bailout boosted demand for higher-yielding assets.

Norway’s krone climbed to its strongest level since November versus the U.S. currency as oil prices jumped to a nine-month high. The two Nordic currencies also appreciated against the yen as stocks gained and China’s central bank cut reserve requirements for lenders, damping investor appetite for safer assets.

“There has been an improvement in risk appetite” and that is helping the Swedish and Norwegian currencies, said Henrik Gullberg, a currency strategist at Deutsche Bank AG in London. Norway’s krone “has benefitted a lot from the rally in oil prices,” he said.

Sweden’s krona gained 1.1 percent to 6.6436 per dollar at 5:09 p.m. London time after rising as much as 1.4 percent, the biggest intraday advance since Jan. 19. The currency climbed 0.3 percent to 8.8138 per euro.

The Norwegian krone appreciated 0.8 percent to 5.6671 per dollar after rising to 5.64, the strongest since Nov. 14.

European officials are meeting in Brussels today to discuss a 130 billion-euro ($172 billion) aid package for Greece. Their talks on the country’s second bailout in two years aim to tackle demands made on Greek leaders, a debt swap among private creditors and the role of the European Central Bank.

China Easing

China’s central bank said on Feb. 18 the proportion of cash that lenders must set aside will drop half a percentage point from Feb. 24 as policy makers seek to boost lending and sustain economic growth.

Sweden’s krona gained 0.6 percent today against a basket of 10 developed-nation currencies tracked by Bloomberg Correlation- Weighted Indexes. Norway’s krone rose 0.3 percent.

The Swedish central bank cut its key interest rate to 1.5 percent on Feb. 16. Norway’s benchmark is 1.75 percent. Those compare with at low as zero in the U.S. and Japan. Norway is the world’s seventh-biggest oil exporter.

--Editors: Nicholas Reynolds, Daniel Tilles

To contact the reporter on this story: Lukanyo Mnyanda in Edinburgh at lmnyanda@bloomberg.net

To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net


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