24 Jun 2013
Flash: EUR/SEK to target 8.63? - Danske Bank
FXstreet.com (Barcelona) - Danske Bank analysts feel that considering that they are quite convinced that the Riksbank will not do a copy-cat of Norges Bank, the spike higher in EUR/SEK seen Thursday and Friday after the Norges Bank’s new rate path was published looks overdone.
They note that even though their short-term financial model for EUR/SEK has been edging higher recently, it still points to a fair value of just 8.63 for EUR/SEK. In their view the move higher in EUR/SEK was also fueled by the poor risk sentiment that has prevailed since the FOMC meeting. They write, “The currency market seems to fully ignore last week’s SEK-positive news. The state is selling yet another share of Nordea that will be settled tomorrow and the NIER data point towards a clear improvement in the Swedish economy, effectively closing the door for a new rate cut from the Riksbank.”
They note that even though their short-term financial model for EUR/SEK has been edging higher recently, it still points to a fair value of just 8.63 for EUR/SEK. In their view the move higher in EUR/SEK was also fueled by the poor risk sentiment that has prevailed since the FOMC meeting. They write, “The currency market seems to fully ignore last week’s SEK-positive news. The state is selling yet another share of Nordea that will be settled tomorrow and the NIER data point towards a clear improvement in the Swedish economy, effectively closing the door for a new rate cut from the Riksbank.”