The Riksbank announced that it will be keeping the policy rate unchanged at 4.00%. Economists at ING still expect SEK strength next year, but a bumpier appreciation path after this meeting.
EUR/SEK forecasts unchanged
The Riksbank paused, but inflation and currency-related concerns prompted policymakers to threaten another hike and open the discussion on faster bond sales. However, we don’t forecast any more hikes, given the deteriorating activity outlook.
We have called for a correction in high-beta currencies after the post-US CPI rally, and we have a modest bullish bias on EUR/SEK into year-end, where we could see a return of levels around 11.60.
Should our baseline scenario of a benign USD decline and generalised support for pro-cyclical currencies materialise next year, then EUR/SEK should be able to hit 11.00 before year-end 2024.
Where November’s Riksbank decision may end up having an impact on the SEK outlook is in the periods of risk-off corrections. The change in stance by the Riksbank makes SEK more vulnerable, especially in the near term, meaning the depreciation path may be bumpier.
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.