The Dollar Rollercoaster
When I first arrived in Sweden back on July 8th, the dollar (USD) was trading against the Swedish krona (SeK) lower than I had ever seen it – approximately 5.95 SeK to 1 USD. Between July and 1 week ago, the dollar climbed to a rather high (though not the highest I’ve seen) – 8.30 SeK to 1 USD. That amounts to a 28% rise in the value of the dollar over a 4 month period! The dollar is falling again now, today alone it was down here about 4.75% to 7.62 SeK to 1 USD. Below is a chart that shows the rise and fall of the dollar (made here).
In an article from today titled “European Markets Decline, and Dollar Falls Sharply“, The New York Times has some analysis on the recent slump. The article points out that today “the dollar fell to its lowest against the [Japanese] yen since August 1995″.
I don’t make any claim that I can figure out what is going on with the dollar or the krona. But if the new trend continues, one thing that does seem clear is that the falling price of oil and gas and record drop in retail prices happening in the US is not going to last for long. That is probably unfortunate, both because my States-side friends and family are going to again be paying more for less, but perhaps more importantly, it indicates the US economy hasn’t hit bottom yet.
The Swedish Krona is a fairly insignificant currency, compared to Euro or Yen or British Pounds, so it’s likely not interesting to many folks. But at this point my income is in USD while most of my expenses are in Swedish Krona, so the exchange rate is more than a casual interest. Considering I watch international exchange rates as closely as I do, I thought I’d share what is happening in my little-noticed corner of the world.
economics posted by: dan @ 17 Dec 2008 15:48