EUR/SEK: The current krona losses are once again excessive – Commerzbank
|The Swedish krona is unable to escape recession fears. But in the view of economists at Commerzbank, the EUR/SEK pair should move back down to the 10.35 area.
Riksbank is turning into a hawk
“EUR/SEK is once again trading above 10.70. However, I urge caution in this context as the ECB will have to meet the market expectations this week, as otherwise there is potential for a correction in the euro.”
“The Riksbank expects interest rates to peak at 2% in mid-2023. I assume that it will hike its key rate by 75bp on 20th September and raise its rate path. Moreover, it is likely to continue sounding hawkish. As a result, the Riksbank should then be on a par with the ECB.”
“If market sentiment has also improved at that point there is nothing preventing EUR/SEK exchange rates in the area of 10.35 any longer so I stick to my view that the current SEK losses are once again excessive.”
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