EUR/SEK seen at 9.20 in 12-month – Danske Bank
|Senior Analyst at Danske Bank Stefan Mellin sees the Swedish Krona appreciating towards the 9.20 area vs. the single currency within a year’s time.
Key Quotes
“Growth momentum has turned from a headwind into a tailwind for the SEK, which is part of the reason the EUR/SEK has dropped recently from above 10.00 to 9.50, our 1M target”.
“Another more important factor is the market’s reassessment of the Riksbank. The QE programme is set to run throughout H1 but will not be extended beyond that, in our view. The repo rate will not be cut further”.
“However, should the krona appreciate too rapidly or inflation disappoint, we expect a response from the Riksbank. We think that the first line of defence is to postpone the first hike further. We forecast EUR/SEK at 9.50, 9.40, 9.30 and 9.20 in 1M, 3M, 6M and 12M”.
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