Swedish krona falls after central bank’s rate hike

Financial markets were quacked on Tuesday by Swedish central bank’s decision to raise rates by a full percentage point. The rate hike by the Riksbank was larger than analysts had expected, causing the Swedish krona to briefly spike against the Euro and Dollar.

The krona practically failed to hold onto that strength. The Euro extended recent gains, climbing to a fresh six-month top of 10.8590 kronas. The Euro was last up 0.6% at 10.91 while the dollar also climbed 0.6% to 10.91 kronas.

In a way, this was an attempt by the Riksbank to lift the krona, but it failed, and it is not surprising in light of the relationship between European currencies and central bank policies had been breaking down as markets increasingly traded on the energy and growth outlook for Europe instead.