Swedish Krona: Hormuz reopening could lift SEK against NOK - Commerzbank
Commerzbank’s Michael Pfister analyses NOK/SEK through oil-price sensitivity and rate expectations. He finds the Norwegian Krone reacts more strongly to oil than the Swedish Krona, while Riksbank expectations adjust more to oil shocks than Norges Bank.
Commerzbank analyst Michael Pfister reveals that the reopening of the Strait of Hormuz could lead to the Swedish krona appreciating against the Norwegian krone. The Norwegian krone is more sensitive to oil price fluctuations than the Swedish krona, which has experienced a decline since the onset of the war while the Norwegian krone has been the top performer among G10 currencies.
This disparity is due to Sweden's lower reliance on energy imports compared to Norway. When oil prices fall and interest rate expectations are priced out, the Swedish krona is expected to appreciate slightly more than the Norwegian krone, given its relatively lower exposure to energy market fluctuations. Therefore, a sustainable reopening of the Hormuz Strait could result in the Swedish krona gaining ground against the Norwegian krone.
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