USD/SEK to reach 8.95 highs as Riksbank reaffirms its dovish credentials – Rabobank
|The Swedish krona is set to continue to be pressured by dovish central bank policies in the months ahead. Economists at Rabobank expect the USD/SEK to head towards the 8.95 October 2020 high on a break above 8.80.
In the dovish camp
“Dependent on the data flow in the months ahead, the market is likely to continue to speculate whether the Riksbank will bring a rate hike forward to 2023 from 2024, but the central bank’s dovish position relative to others suggest that the SEK is likely to remain a laggard in the G10 performance table.”
“Given that we also expect the EUR to remain on the back foot, we prefer to buy USD/SEK on dips. A concerted break above the USD/SEK 8.80 level could put the Oct 2020 highs close to 8.95 in play.”
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