NOK, SEK keeps navigating opposite ways – Danske Bank

Allan von Mehren, Chief Analyst at Danske Bank, noted the Swedish Krona is expected to depreciate further in the next months.

Key Quotes

“Some may argue that the Swedish housing market has troughed already. We disagree and that is one reason why we have a negative take on the SEK and still doubt that the time has come for a material rebound”.

“That said, a large part of the recent spike in EUR/SEK toward 10.30 is probably more about global risk sentiment. If investor risk appetite improves, there is room for a downward correction in EUR/SEK”.

“Note further that NOK/SEK continues to break higher reaching year highs. We continue to see long NOK/SEK as a better way to express a bullish NOK view than short EUR/NOK. NIBOR fixings continue to be at relatively elevated levels and the risk is likely to the downside, which will be NOK negative. Note also that oil is looking toppish, while the turn lower in the global industrial cycle is a NOK negative as well”.