EUR/SEK: Swedish krona set to appreciate, but not because of Riksbank – ING
|The Riksbank is one of the most dovish central banks in the G10 FX spectrum and is certainly not to help the Swedish krona to appreciate. Nonetheless, the EUR/SEK pair is set to fall and end the year around the 9.80 level as other factors should support the SEK, in the opinion of analysts at ING.
EUR/SEK to move below the 10.00 level this summer
“The May CPI cemented the Riksbank’s view that the inflation overshoot should be temporary and the bank won’t react to it. We expect Riksbank to remain on hold both this year and next.”
“While Riksbank is within the more dovish end of the spectrum in the G10 FX space and won’t offer much help to SEK, we nonetheless expect EUR/SEK to continue grinding lower and move below the 10.00 level this summer. SEK should benefit from the soft USD environment and the European economic recovery.”
“We target EUR/SEK 9.80 by year-end. EUR/SEK around current levels is still overvalued based on our medium-term BEER model.”
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