EUR/SEK still faces downside risks – Danske Bank

Morten Helt, Senior Analyst at Danske Bank, noted the cross still points to extra downside in the near term.

Key Quotes

“With the outlook of the next move higher in NOK we yesterday took (a small) profit on our short NOK/SEK position. Initially, we wanted to await the Swedish inflation print today before closing the position as our Swedish economists had an above-consensus call for the release”.

“Meanwhile, looking at the details of the Norwegian and Danish inflation prints, there is now downside risk to their estimates and therefore we prefer to take profit now. We book a small profit of 0.1%. More fundamentally on the SEK, we cannot rule out more near-term EUR/SEK downside but emphasise that we still think markets underestimate the negative growth implications of lower housing investments as well, as we think the Riksbank's inflation projections are too optimistic, especially for next year. We therefore look to fade any EUR/SEK move lower on a 3-6M horizon”.

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 securities. 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 Forex 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.