EUR/SEK seen between 9.45 and 9.70 next months – Danske Bank

Thomas Rosenlund, Analyst at Danske Bank, expects the Swedish Krona to navigate between 9.45 and 9.70 in the next months.

Key Quotes

“EUR/SEK has recovered somewhat following the strong decline on Thursday, where the cross fell on the back of the high Swedish inflation print”.

“While the cross still trades above the fair value implied by short-term interest rates, which is around 9.50, we still see EUR/SEK trading in the range of 9.45-9.70 over the next few months”.

“The SEK is indeed weaker than the Riksbank’s forecast, but at the same time, the money market curve is still steeper than the Riksbank path – a contradiction that is likely to be an obstacle for any meaningful rebound in the SEK near term”.