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On the development of the SEK exchange rates in January 2024
In this blog post, we will analyse the development of the SEK exchange rates in January 2024. We will use a Power BI report that is available in our Portfolio. In case you are interested in an analysis over a longer time period, we have previously written a blog post about that.
The source of all data is the Swedish central bank – the Riksbank.
January 2024 overview
We start by going to this page, and change the year filter to 2024. We then click on January in the table. A good feature with Power BI, is that it is dynamic and by clicking on January, the rest of the page updates with January as a filter.
We then see in the chart on the top left, that SEK only strengthened against one of the currencies – Japanese yen (JPY) – out of the ones present in the report. We also see that there were no dramatic changes in January, and all movements were approximately within the range -2% to +3%. It can be noted here that + means that SEK weakened, and – means that SEK strengthened. For example, if the EUR-SEK exchange rate goes from 10 to 11, that +1 change is a weakening of the SEK.
We note that SEK weakened the most against Pound sterling (GBP) at 2.4% and then with 2.1% against the US Dollar (USD). The SEK barely changed against CHF (+0.6%) and NOK (+0.4%).
Zooming in on the chart of percentual exchange rate development, it will look like below. We see that in the very last days of January, there was a strengthening of the SEK against all currencies.
If we review the movements of the SEK 5 and 10 years bond yields, and compare to the development of the same for USD respective GBP, we also see no dramatic movements that could explain the exchange rate development. In addition, we see that the SEK bond yields were all up in January, for example the 10 years yield went from 2.11% to 2.22%.
Finally, we dive a bit deeper in regards to the bond yields. Using the two pictures above, we see (in Power BI only) that the USD 5 years bond went from 3.92% to 3.84% (-8 bps) in January while the SEK 5 years bond went from 2.01% to 2.16% (+15 bps). Conversely, the GBP 5 years bond yield went from 3.55% to 3.74% (+19 bps), which is more in line with the SEK equivalent.
Summary
In January 2024, there were no dramatic changes of the SEK exchange rates compared to major currencies like GBP, EUR and USD. SEK weakened by 2.4% against GBP and by 2.1% against USD, while it strengthened by 1.8% against JPY.
With regards to bond yields, the SEK 5 years yield increased by 15 bps. That can be compared to the USD 5 years yield that decreased by 8 bps and the GBP equivalent which increased by 19 bps.
