26 May 2014
EUR/SEK potential upside ahead – Danska Bank
FXStreet (Edinburgh) - The EUR/SEK could see its upside renewed in the upcoming periods, suggested Senior Analyst Flemming Nielsen at Danske Bank.
Key Quotes
“Next hurdle for the SEK will be on Friday when the Q1 GDP figure is due. Given the very weak investment survey released last week, we expect GDP at -0.4% q/q and 2.0% y/y – well below the Riksbank’s forecast at 2.5% y/y”.
“An outcome of 2% y/y is sufficient to push the Riksbank further towards a cut and it can certainly not be ruled out that the Riksbank will also use the upcoming rate meeting to signal that additional cuts could be on the cards”.
“We target EUR/SEK at 9.10 in 1M but as we are approaching summer, when liquidity is normally low, a significant increase in EUR/SEK in the coming months on SEK-negative news cannot be ruled out”.
Key Quotes
“Next hurdle for the SEK will be on Friday when the Q1 GDP figure is due. Given the very weak investment survey released last week, we expect GDP at -0.4% q/q and 2.0% y/y – well below the Riksbank’s forecast at 2.5% y/y”.
“An outcome of 2% y/y is sufficient to push the Riksbank further towards a cut and it can certainly not be ruled out that the Riksbank will also use the upcoming rate meeting to signal that additional cuts could be on the cards”.
“We target EUR/SEK at 9.10 in 1M but as we are approaching summer, when liquidity is normally low, a significant increase in EUR/SEK in the coming months on SEK-negative news cannot be ruled out”.