On Tuesday, we previewed today’s high-stakes Riksbank meeting, concluding, “Sweden’s 0% interest rate may actually look attractive compared to the negative interest rates in the Eurozone and Denmark. Therefore, the central bank may choose to cut interest rates slightly to -0.1% or -0.2% to prevent any further appreciation in the krona."
The yen fell to a seven-year low versus the dollar on speculation Japan’s Prime Minister Shinzo Abe is considering postponing a planned sales-tax increase and preparing to call a snap election next month.
Australia’s dollar fell below 90 U.S. cents for the first time since March, and Sweden’s krona declined after elections as prospects for U.S. interest-rate increases next year boosted the greenback’s allure.
The dollar strengthened to a 14-month high and commodities declined to the lowest level in five years after data added to evidence China’s economy is slowing. Russia’s ruble weakened to a record after the European Union and U.S. imposed new economic sanctions.