EUR/SEK likely to drop to 9.35 by mid-2017 – Lloyds Bank
|Research Team at Lloyds Bank forecasts the appreciation of the SEK to accelerate over the coming year, with EUR/SEK dropping to 9.35 by mid-2017 and to 9.10 by year end.
Key Quotes
“The Swedish economy grew by over 3% last year, making it one of the fastest-growing advanced economies in 2016. Despite the strong performance, inflation remained weak and underperformed relative to the Riksbank’s expectations. While the economy has started the year on a solid footing, the slow upturn in inflation so far in 2017 remains a key concern for the Riksbank. Still, given the growing opposition to further easing at the central bank, the bar for additional stimulus is now much higher. In our view, this likely reflects the continued resilience of the Swedish economy and the expected feed-through from past krona weakness to inflation. This raises the likelihood of a more pronounced rise in inflation in the second half of this year, with annual headline CPI expected to reach the central bank’s 2% target in early 2018. We remain of the view that the SEK is significantly undervalued.”
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