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12 Mar 2015
Further rate cuts by the Riksbank not ruled out – Danske Bank
FXStreet (Edinburgh) - Senior Analyst Pernille Nielsen at Danske Bank has not ruled out the possibility of further easing by the Swedish central bank.
Key Quotes
“In the Scandi FX market, the SEK gained further against the EUR and NOK yesterday after the series of Swedish inflation figures and survey data”.
“We still see risks tilted towards more Riksbank action (some further room for a rate cut but in combination with expanded bond purchases)”.
“Especially, we think that further downside in EUR/SEK is a factor that could force the Riksbank to act despite higher spot inflation”.
“Technically and valuation wise, EUR/SEK is oversold but in the short term EUR/SEK remains caught between the ECB’s QE on the one side pushing the cross downwards and a possible Riksbank reaction on the other side triggering a temporary bounce. Fundamentally, we still expect the SEK to appreciate against the EUR on a six to 12 months’ horizon targeting the cross at 8.90 in 12M”.
Key Quotes
“In the Scandi FX market, the SEK gained further against the EUR and NOK yesterday after the series of Swedish inflation figures and survey data”.
“We still see risks tilted towards more Riksbank action (some further room for a rate cut but in combination with expanded bond purchases)”.
“Especially, we think that further downside in EUR/SEK is a factor that could force the Riksbank to act despite higher spot inflation”.
“Technically and valuation wise, EUR/SEK is oversold but in the short term EUR/SEK remains caught between the ECB’s QE on the one side pushing the cross downwards and a possible Riksbank reaction on the other side triggering a temporary bounce. Fundamentally, we still expect the SEK to appreciate against the EUR on a six to 12 months’ horizon targeting the cross at 8.90 in 12M”.