The SEK has boosted by almost 13% vs the USD and 4% vs the EUR over the last three months. Jeremy Stretch from CIBC Capital Markets expects the appreciation to continue into the year-end and forecast the EUR/SEK trading at 10.35 by the third quarter and at 10.20 by end-2020.
“Since the economy was not locked down like most other majors, there has been a limited degree of collateral damage. Annual retail sales troughing at -1.4% underlines the moderate scale of macro negativity. The Riksbank has still adopted further unconventional monetary policies, via the expansion in QE to SEK 500 billion and the bank is set to start purchasing corporate bonds in September.”
“The pace of QE purchases suggests that the central bank is in no hurry to utilise its policy tools. The inflation data in particular validates central bank reticence. That suggests greater policy visibility will come in the autumn, with the bank being likely to limit expectations of additional expansion.”
“The bank appears likely to avoid a return to negative rates, even though central bank Governor Ohlsson has acknowledged that it is not impossible to consider negative rates. With key trading partner Germany set to benefit from fiscal expansion, we maintain a continued bias towards SEK gains into year-end, although we would be unsurprised if there was modest consolidation first.”
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.