EUR/SEK plummets to multi-day lows near 11.2000 post-Riksbank
- EUR/SEK accelerates losses to the 11.2000 region.
- The Riksbank hiked the policy rate by 50 bps, as expected.
- Further rate raises are likely during the spring, said the bank.
The Swedish krona sees its buying interest picking up pace and drags EUR/SEK to fresh multi-session lows near 11.2000 on Thursday.
EUR/SEK weak after hawkish Riskbank
EUR/SEK intensifies the weekly leg lower and trades closer to the key 11.0000 support after the Riksbank raised the policy rate by half percentage point at its meeting on Thursday, broadly in line with market expectations.
The Scandinavian central bank justified the rate hike on the still elevated inflation in Sweden, at the time when the statement suggested further rate hikes at some point in the spring.
Additionally, the Riksbank announced it will sell government bonds to reduce its asset holdings from April.
Updated projections from the central bank now sees the headline CPI at 8.6% in 2023 (from 9.3%) and 3.6% in 2024 (from 3.0%), while the GDP is forecast to expand 5.5% this year (from 5.7%) and 1.9% in 2024 (from 1.5%).
EUR/SEK levels to consider
So far, the cross is retreating 0.70% at 11.2654 and a breakdown of 11.2334 (monthly low February 9) would expose 11.1101 (55-day SMA) and then 11.0767 (2023 low January 24). On the other hand, the next up barrier comes at 11.4426 (2023 high February 6) followed by 11.7885 (all-time high March 6 2009).
Author
Pablo Piovano
FXStreet
Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.
