The Euro Drives On
The Euro rallied today, making gains on both the Yen and the US dollar, as investor confidence in the ECB’s claims to save the Euro shined through once again. The belief is that the European Central Bank will heavily bolster its current rescue fund in a massive push to save the single currency.
The Euro saw gains of 0.6% on both the Yen and US Dollar, closing at Y96.70 and $1.2352 respectively. The GBP was also another sufferer, falling by 0.4% and closing at £0.7866 to the Euro.
Even the Swedish Krona wasn’t safe, as the Euro began to claw back at the currency which has seen something of a meteoric rise over the last few weeks. Investors have been using the US$ and the Yen as safe havens for their money since the Euro Crisis began but have recently turned their attentions to something a little closer to home.
The Krona has risen a little over 9% against the US dollar since June – more than any other currency. The concern now is that the Swedish economy may actually falter due to the country largely depending on its exports, which have maintained the country’s strength over the last few years, and the increased cost of production.
While this is set to affect exporters of low value goods, the majority of swedish companies will not see any negative side effects. A Lot of Sweden’s exports are high value technology and electronics, where the end user is less concerned about a price hike of a few dollars. Volvo, one of the world’s biggest car manufacturers, had even seen its operating income increased by 7% under the supposed ‘negative’ conditions.
While there is currently no real concern about the short term stability of the Krona, these concerns did have an effect on the currency’s value as it fell 0.9% on the dollar