The Norwegian krone and Swedish krona have followed very similar patterns so far this year: a weak first quarter and a second-quarter rebound. In line with its lower liquidity character, and in turn higher beta to risk sentiment, NOK has shown higher volatility than SEK. External drivers have dominated so far this year for Scandinavian FX. As shown in the chart below, NOK has had a slightly higher sensitivity than SEK to moves in short-term USD rates, which also explains the wider moves on both upside and downside in NOK. However, the correlation for both currencies with Federal Reserve pricing has been similar – and ... (full story)