No Easy Sell for Traders Trapped in Scandanavia

Relatively low liquidity of Norwegian krona and Swedish krone is making those currencies hard to exit as they decline.

Foreign-exchange traders becalmed by central-bank largesse are finding that even currencies from Group of 10 nations are about as hard to escape as emerging markets once volatility rises.

Norway’s krone is the biggest loser among 31 currencies tracked by Bloomberg since June 18, the day before the Federal Reserve signaled it may reduce its stimulus measures this year, falling 5.8 percent against the dollar and 3.2 percent versus the euro. Sweden’s krona posted the second-biggest drop. The declines exceeded those of the Polish zloty and Indian rupee.

Rising Volatility

The JPMorgan Global FX Volatility Index, which measures price swings in currencies, rose as high as 11.96 this week from a more than five-year low 7.05 in December.

Page 2 of 2

Copyright 2016 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Comments

Advertisement. Closing in 15 seconds.