The export-oriented economy's currency has displayed an unusually high sensitivity to risk sentiment since the discovery of the Omicron variant hit markets last Friday.
The crown's more than 5% drop in November versus the greenback came at a time when the euro rallied thanks to a bout of short position covering by hedge funds, which had previously ramped up short bets on the single currency.
November's drop leaves the crown as the worst performing developed market currency so far this year, with its slide of more than 10% even worse than the struggling Japanese yen, according to Refinitiv data.
"Short-SEK trades may have become an increasingly popular proxy trade to bet against EU-sentiment given the euro is finding support in the current risk-off environment," ING strategists wrote in a note, referring to the crown by its popular moniker.
This week, Goldman Sachs cut its forecast for the crown versus the dollar over the next three months by more than 4%. A Citigroup economic surprise index for Europe has underperformed its U.S. and Chinese counterparts since September.
Analysing currency market trends from March 2020, Kenneth Broux, a currency strategist at Societe Generale in London, estimates the crown has a greater degree of sensitivity and more volatility than some of its rivals, such as the Australian dollar, making it a prime candidate for short-sellers.
That high sensitivity combined with falling market expectations of central bank rate hikes over the next 12 months is weighing on the crown, with risk reversals - a ratio of bearish to bullish bets on the currency - trading at their highest levels since January.
"Classically the Swedish kroner (crown) is, and I'm an old foreign exchange trader, something I would short if I'm short global growth, and in particularly if I'm short European growth," said Steen Jakobsen, chief economist at Saxo Bank.
(Reporting by Saikat Chatterjee; Additional reporting by Julien Ponthus; Editing by Mark Potter)
By Saikat Chatterjee