News labeled Foreign Exchange:

Norwegian investors have not acquired any major positions in the country’s currency during the past six months despite the recent strong performance of the krone, suggesting the rally has been driven by foreign investors. SEB’s experts see the krone trading around current levels for the remainder of 2012.

SEB’s economists in a note says that while the ongoing crisis in the euro zone and worsening economic outlook for many of the UK’s important trading partners are downside risks, leading indicators such as the PMIs have been encouraging, suggesting that GDP growth will turn positive again in the current quarter. The UK may thus escape a technical recession. All in all, SEB’s GDP forecasts have been lowered to 0.4 per cent for 2012 and 1.7 per cent in 2013.

SEB’s economists have raised their forecast for China’s GDP growth to 8.5 per cent in 2012 and 8.7 per cent in 2013 following growth of 8.9 per cent in the fourth quarter of 2011. The economists say that as long as the euro zone debt and banking crisis does not spread globally there’s a chance growth could exceed the forecast.

There have been some encouraging economic data lately but the euro zone is still unlikely to avoid a recession, SEB’s economists say in a research note. Weakening growth prospects, delayed reforms and political challenges imply that a Greek exit from the euro zone is a distinct possibility. However, a break up of the whole euro zone is still unlikely but success depends on continuing support from the ECB combined with national adjustment programmes and further steps toward a fiscal union.

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