EUR/SEK to stage a sideways move for the foreseeable future – Commerzbank
A swing by the Riksbank toward a more restrictive stance in April is overdue. The krona has appreciated in line with the restrictive comments from Executive Board members that this is finally likely to come. This means that a lot has already been priced in. Therefore, the krona does not have much more upside potential, economists at Commerzbank report.
U-turn of the Riksbank overdue
“A U-turn of the Riksbank is overdue, considering inflationary risks, and should come in April. With more and more Executive Board members signaling this move, the krona has appreciated. However, this should also mean that a lot has already been priced in and that the krona doesn't have much more upside potential, especially since the ECB is also likely to raise the key rate in autumn.”
“EUR/SEK is likely to move sideways for the foreseeable future. Only next year, when the ECB will end its interest rate cycle again, but the Riksbank will likely continue with gradual interest rate hikes, should the SEK be able to appreciate somewhat again.”
Author
FXStreet Insights Team
FXStreet
The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.
