12 May 2015
EUR/SEK expected to grind lower – Rabobank
FXStreet (Edinburgh) - According to Jane Foley, Senior FX Strategist at Rabobank, the negative bias could prevail in the cross in the upcoming months.
Key Quotes
“The Riksbank may not have cut interest rates at its April 29 policy meeting but it increased QE and warned that further aggressive policy measures could be forthcoming”.
“One constraining influence is the heady level of household debt. This has been of concern for some time and recent data showing a stronger than expected 6.4% y/y March rise in household debt suggest little sign of the trend abating”.
“While the Riksbank remains on guard against deflationary forces, the lack of a rate cut last month does come against an improvement in domestic fundamentals”.
“CPI inflation has moved off its lows and the Riksbank points to a rise in inflation expectation – a sure sign that the deflation battle is working. We expect a modest downside bias in EUR/SEK”.
Key Quotes
“The Riksbank may not have cut interest rates at its April 29 policy meeting but it increased QE and warned that further aggressive policy measures could be forthcoming”.
“One constraining influence is the heady level of household debt. This has been of concern for some time and recent data showing a stronger than expected 6.4% y/y March rise in household debt suggest little sign of the trend abating”.
“While the Riksbank remains on guard against deflationary forces, the lack of a rate cut last month does come against an improvement in domestic fundamentals”.
“CPI inflation has moved off its lows and the Riksbank points to a rise in inflation expectation – a sure sign that the deflation battle is working. We expect a modest downside bias in EUR/SEK”.