Bad economic news made Sweden's currency the top performer.

• Sweden hikes economic growth forecast
• Strong krona pushes Sweden's trade into the red

The Swedish krona reached its strongest level against the dollar in two years Thursday after a "hawkish" speech by the Riksbank Deputy Governor and expectations of more monetary easing from the US Federal Reserve.

The krona rose more than 1 percent against the dollar, to 6.56, making it Thursday’s top performer against both the euro and the dollar of the 16 major currencies.

Traders are banking on the U.S. Federal Reserve introducing more monetary easing -- notably by buying up bonds and other assets -- at its November policy meeting in order to kickstart recovery in the sluggish economy.

"You now have this perverse situation where bad economic news in the US is good news for equities because it supports the case" for quantitative easing, BBY senior institutional trader Peter Copeland told Dow Jones Newswires.

The Swedish currency was also boosted by a fiery speech by Riksbank Deputy Governor Barbro Wickman-Parak on Thursday. She called for more interest-rate rises, preferably as soon as possible.

“I do not believe in a wait-and-see strategy that could mean that the repo rate needs to be raised even faster further ahead,” Wickman-Parak said in a speech.

Policy makers have raised the repo rate twice since July, bringing it to 0.75 percent at their September meeting. They announce their next decision on Oct. 26.

“We see some support to the krona from a hawkish Riksbank,” Jens Nordvig, managing director of currency research in New York at Nomura Holdings, wrote in a note. “Strong domestic activity, shrinking excess supply and high credit growth mean that the Riksbank should continue hiking rates.”

However, currency analyst Jenny Mannent at Handelsbanken said the speech was over-interpretated by the market as it didn’t contain any new information.

Norway’s krone rose to the strongest since January against the dollar as the price of crude oil, the nation’s biggest source of exports, rose to 84 dollar a barrel.

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