EUR/SEK bounces off multi-day lows near 10.1300

  • EUR/SEK adds to the pessimism seen on Monday near 10.1300.
  • Sweden headline CPI rose 0.5% MoM, 2.1% YoY in August.
  • The Riksbank is seen on hold at its September 20 meeting.

The Swedish krona gathers further pace in the first half of the week and drags EUR/SEK to new multi-day lows in the 10.1300 zone.

EUR/SEK weaker post-CPI

EUR/SEK adds to Monday’s strong pullback and re-visits the 10.1300 area, or multi-day lows in a context of the generalized consolidative mood in the global markets ahead of the release of the US inflation figures.

The krona picked up extra pace after inflation figures in Sweden showed the CPI rising 0.5% MoM during last month and 2.1% over the last twelve months. Tracked by the CPIF (CPI at constant interest rates), prices went up 0.5% vs. the previous month and 2.4% from a year earlier.

Higher inflation figures lent support to SEK and added to recent auspicious results from Industrial Production and GDP figures in the Scandinavian economy published in past sessions.

The Riksbank, in the meantime, is expected to keep rates unchanged at the next monetary policy meeting on September 20. It will be interesting to see the bank’s views on the future of the policy rate in light of the higher inflation and solid performance of fundamentals in past months.

EUR/SEK levels to consider

So far, spot is losing 0.15% at 10.1475 and a breakout of 10.1973 (55-day SMA) would expose 10.2132 (monthly high Sep.9) ahead of 10.2546 (high Aug.26). On the other hand, the next support emerges at 10.13002 (low Sep.14) followed by 10.1248 (monthly low Sep.6) and finally 10.0874 (monthly low Jul.5).

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