Economists at Danske Bank see near-term risks in EUR/SEK skewed on the upside and forecast the cross at 10.40 in one-to-three months.
“We see a high likelihood that the reflation story will backfire as data may no longer meet expectations at a point where global surprise indices are clearly in stretched territory. Political risks are piling up and the epidemiological risks seem to be mounting as well, and that is unlikely to pass unnoticed by either the real economy or financial markets. Against this less optimistic backdrop we see near-term risks in EUR/SEK being skewed to the upside.”
“We are lifting the one-to-three months forecast from 10.20 to 10.40. In 2021, the world should be closer to a vaccine/sustained recovery, which should support the krona. The Swedish inflation outlook remains a headwind for the SEK long-term. We lower the EUR/SEK six-to-twelve month forecast from 10.40 to 10.20.”
“Continued risk-on reflation and USD bashing would probably feed through into an even stronger SEK where USD/SEK may drop towards/below 8.00 and EUR/SEK towards/below 10.00. If risk sentiment turns nasty enough, EUR/SEK could go well beyond 10.40. We would probably need to see the SEK appreciation escalate further before the Riksbank steps in.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.