Swedish Krona Falls as Manufacturing Declines

The Swedish krona fell as the report showed that manufacturing in Sweden contracted last month, reinforcing outlook that the nation’s central bank would cut interest rates. The Swedbank manufacturing index fell to 48.7 in August from 50.1 in July, while the average forecast was 49.8. A reading below 50.0 indicates decline. That was the first decline in two years. The unfavorable report supported the view that the Swedish economy is just too week to bear the current level of borrowing costs, let alone to survive with additional tightening. According to the Credit Suisse index the central bank will cut interest rates over the next 12 months. USD/SEK jumped from 6.3377 to 6.4127. The currency pair has recovered somewhat today, trading at about 6.3936 as of 1:45 GMT.