EUR/SEK: Krona to record further gains if Riksbank sounds determined to raise rate path further – Commerzbank
The Krona has recovered somewhat from its lows at the beginning of June. Economists at Commerzbank discuss SEK's outlook.
If Riksbank does not deliver, the SEK is likely to ease again
In April the Riksbank had announced a further rate step for June or September. In my view it is clear: it will have to hike interest rates in June and definitely keep the door open for September and possibly beyond that. Anything else would not be sufficiently restrictive in my view and the market would react with SEK sales.
The Riksbank will have to sound determined at the end of June to raise its key rate path further and see the terminal rate above 3.65%. In that case, the Krona would have a chance to record further gains. If Riksbank does not deliver though, the SEK is likely to ease again.
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FXStreet Insights Team
FXStreet
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