EUR/SEK keeps pointing higher – Danske Bank

Senior Analyst at Danske Bank Kristoffer Lomholt has assessed the prospects of the greenback in the upcoming US elections.

Key Quotes

“We have changed our EUR/SEK forecast. The trend in EUR/SEK is still pointing higher, and until we see a trigger for a turnaround this uptrend could well continue”.

“However, we think that the upside potential from here is limited, as (1) the (final) Riksbank cut that we call for is partially priced in, (2) data momentum is starting to turn around and (3) valuation is getting stretched”.

“Given our revised call on the Riksbank, we raise the 1M forecast to 10.00 (previously 9.70), 3M to 9.70 (9.50), 6M to 9.40 (9.30) and 12M to 9.30 (9.20)”.

“In respect of the US election, we think that a Trump win would be negative for the SEK short term in a risk-off environment and longer term as protectionist policy would be bad for a small open economy. A Clinton win, our base scenario, would have less impact on the SEK”.