EUR/SEK tumbles to 3-month lows post-CPI

The Swedish Krona is sharply higher vs. its European peer on Thursday, now relegating EUR/SEK to the area of fresh 3-month lows in the 9.5600 region.

EUR/SEK weaker post-data

SEK picked up extra pace after inflation figures in Nordic economy surprised to the upside for the month of June, showing consumer prices rose at an annualized 1.7% (vs. 1.6% expected) and 0.1% on a monthly basis (vs. -0.1% forecasted).

Further data showed CPIF (CPI at constant interest rates) rising 0.1% inter-month and 1.9% over the last twelve months, beating initial estimates.

It is worth mentioning that inflation expectations tracked by TNS Sifo Prospera (a survey commissioned by the Riksbank) stayed unchanged in July vs. the previous month. In fact, the CPI is seen at 1.7% in the first year, 1.9% in the second year and 2.0% in the fifth year. Regarding the repo rate, money market players now expect it to climb to -0.3% in a year’s time, 0.3% within 24 months and 1.7% in 60 months.

In the meantime, the cross is losing ground for the third week in a row today, trading in levels last seen in early April around 9.54 and close to the 38.2% Fibo retracement of the February-June up move.

EUR/SEK levels to consider

As of writing the cross is losing 0.67% at 9.5428 and a breakdown of 9.5052 (low Apr.3) would aim for 9.4918 (23.6% Fibo retracement of the February-June up move) and then 9.4503 (low Mar.17). On the upside, the immediate barrier is located at 9.6231 (10-day sma) seconded by 9.6511 (200-day sma) and finally 9.6893 (21-day sma).