EUR/SEK: Riksbank to deliver two hikes in the autumn, supporting the krona – Danske Bank

Economists at Danske Bank expect the Riksbank to hike rates in September and November and deliver a final hike in February 2023. Therefore, the EUR/SEK pair may fall more than expected throughout the year.

Two hikes in the autumn, a third next spring 

“Our new call with hikes in September and November and then a final hike in February 2023, will lend support to the SEK in the 1-9M perspective even though one can argue that it is, by and large, priced in.”

“There is slight downside risks to our current 1-6M EUR/SEK forecasts (1M 10.70, 3M 10.50, 6M 10.30) stemming from monetary policy.”

“If the Riksbank delivers what is perceived as a final shot in February 2023, it could be accompanied by headwinds for the SEK as markets temper their expectations on how high the repo rate will go and also via slowing growth expectations. Hence, albeit distant and thus very uncertain, we see slight upside risk to our EUR/SEK 12M forecast (10.30).”