EUR/SEK to close the year around 10.00 and enter a downward path in 2022 – ING
|Economists at ING think Sweden's Riksbank will push back against the market’s hawkish pricing and refrain from pencilling in any hike in November’s rate projections. EUR/SEK may edge below 10.00 in the very short-term but they see a high risk for upside correction in the pair later this year.
SEK may put off further gains to 2022
“Our view is that the market has rushed too quickly to price in a hawkish tilt by the Riksbank and we, therefore, think there is very little room for short-term rates to keep rising in Sweden.”
“We would not be surprised to see EUR/SEK edge below 10.00 before the RB November meeting, especially if the global market mood remains upbeat.”
“We expect markets will be forced to scale down their expectations on Riksbank’s tightening later this year, so we think EUR/SEK will correct higher towards the end of November.”
“EUR/SEK is seasonally weaker in December, so we could see EUR/SEK close the year slightly below the 10.00 mark.”
“As the Riksbank may instead start to provide hawkish hints in 2022 ahead of a 2023 rate hike – which is currently our base case – we expect EUR/SEK to enter a downward path in 2022, aiming towards the middle of the 9.50/10.00 range.”
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