Riksbank Preview: Biggest risk for the SEK is any hint of interest rate cuts in the near future – Commerzbank
An important Riksbank policy meeting is upon us. Economists at Commerzbank analyze Swedish Krona’s (SEK) outlook ahead of the decision.
Will today be a quiet central bank meeting?
The biggest risk for the Krona is probably any hint of interest rate cuts in the near future. Any indication that the Riksbank expects rate cuts sooner than previously would certainly not be helpful for the SEK. However, it should also be noted that although inflation has fallen recently (as in other countries), the core rate is still alarmingly high. It would therefore probably not be conducive to the objective of bringing inflation back to target if the Riksbank were to talk about earlier interest rate cuts.
In addition, no new monetary policy report with a new expected interest rate path will be published at today's meeting. I don't think the Riksbank will make a dovish turn without a new path being published. Sure, there can always be surprises, but the risk is not very pronounced. Accordingly, SEK traders may be in for a fairly quiet central bank meeting today.
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FXStreet Insights Team
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