SEK seen under pressure in the next month – Danske Bank

Senior Analyst at Danske Bank Kristoffer Lomholt assessed the potential scenarios for SEK in an eventual change at the Riksbank.

Key Quotes

“In the Scandies, speculation about an announcement of the next Riksbank Governor has lifted O/N option volatility in SEK crosses”.

“While we still emphasise that we have no insight into the validity of the media reports, it is important to highlight possible scenarios for the SEK”.

“In our view, an appointment of Ingves, Jocknick or Jansson would send EUR/SEK higher, as this would signal ‘more of the same’. This is especially so for Jansson given his focus on ‘fighting’ SEK appreciation”.

“Meanwhile, most other candidates seem more neutral (more unknown), which could weigh on EUR/SEK in terms of lifting speculation about a change in the board balance”.

“Meanwhile, as stated above, the power of the institutional framework should not be underestimated, which in turn means we should not overdo the importance of a possible change of Governor”.