SEK remains vigilant on the Riksbank – Danske Bank

Mikael Milhoj, Senior Analyst at Danske Bank, suggested the Nordic central bank keeps closely following the performance of the Swedish Krona.

Key Quotes

“Regarding the Scandies, there has been more action in USD/SEK than EUR/SEK lately. The significant USD sell-off pushed USD/SEK below the 8.00 mark, but so far key support at 7.90 seems to hold, and we still look for a correction higher the cross”.

“EUR/SEK is zooming in on the Riksbank decision next week: we think the Riksbank will try to avoid sounding hawkish despite the strong data recently, in order to avoid premature tightening of financial conditions. Stefan Ingves and co are probably not overly concerned with the recent decline in EUR/SEK, given it has come on the back of higher inflation”.

“However, we think the central bank ha s a strong interest in keeping further appreciation at bay – not least given that the ECB is out just hours after where the risk is that Mr Draghi will give a dovish message”.