EUR/SEK expected to keep the sideline theme – Danske Bank

Jens Sorensen, Chief Analyst at Danske Bank, sees the cross maintaining the current neutral stance in the near term.

Key Quotes

“We expect EUR/SEK to continue to trade in a narrow range of 9.45-9.55 ahead of the Riksbank meeting on Thursday”.

“We do not expect any changes in the rate, rate path or any new communication about QE, and still look for the cross to remain range bound post the Riksbank meeting”.

“Implied EUR/SEK volatility is expensive at the two-week tenor (and borderline expensive at 1M), according to Danske Banks FX volatility valuation model, and we see value in playing a narrow EUR/SEK range in the near term by selling straddles/strangles within a 1M expiry”.