Swedish Riksbank Sells Dollars, Buys Euros

Sweden's Riksbank today announced that they have been selling U.S. dollars and used the money to instead buy euros and Norwegan kronor.

Good move, as it is likely that the dollar will fall this year against the euro and most other currencies. However, euros wouldn't have been my first choice as I believe the Japanese yen is more undervalued than the euro. Or, even better would have been if they bought gold, which is even more likely to rise than the yen.

Previously, the Riksbank made the very bad move of in fact selling gold and instead buying government bonds. Since that sale, in September 2005, gold have risen nearly 50%, while the yield on the bonds they bought was likely only about 2 to 3%.

The current move is far smarter, although it could have been even more profitable had they been buying yen or gold instead of euros.