Valutor

Ett mail till en kompis igår som svar på en fråga om valutarörelser:

Currencies schmurrencies. Noone can really tell. Better make your own forecast, based on the price of any complex product of your choice in different countries (McD hamburger is the choice of many a renowned economist, the official PPP measure other’s).

The SEK and the GBP got temporarily oversold, I think, but they both probably should start to lose value again vs. the euro and USD. However, currencies are as reliable as women, so don’t put too much at stake on your prediction.

No smart theories out there, but the facts are:

* US is PRINTING money like never before (bad for USD)
* UK has a large debt overhang (bad for GBP)
* Sweden is extremely export oriented and will get more crushed than other countries (bad for SEK)
* The eurozone is almost breaking apart and have huge loans to the crumbling east block that will default (bad for euro)

The question is: What facts are least bad… -I would go with the US situation and bet on the USD to strengthen vs all the rest. Then comes the euro, which is kind of a reserve currency and a possible choice for China when they tire of dollars. Then comes the UK which is the most indebted country of all (public+private debt) but much larger than Sweden and less socialistic. Last comes Sweden (but ahead of Latvia, Ukraine, Russia…) which should have the weakest currency.

Some of the above is already discounted, in particular three weeks ago but we could soon enough end up back there again, so don’t hold too many SEK or GBP I would say. Regarding the SEK vs the GBP that is obviously the really tough question. I would guess 13 SEK on the squid is probably right but as I hope is adamant from this mail; nobody has any meaningful insights into the matter.