SEK: More weakness in store - ING
Analysts at ING are looking for more SEK weakness to come in the months ahead, as the Riksbank’s facilitated SEK strength is sharply diminishing and the Riksbank is rather facing a puzzle of how to prevent its weakness in the low growth and low domestic inflation environment.
Key Quotes
“The soft domestic data and mildly dovish Riksbank April meeting should keep SEK under pressure.”
“After reaching our 1-month target of EUR/SEK 10.60 today, we revise our EUR/SEK forecast higher and look for EUR/SEK to reach 10.75 in 3 months – that is a new post-financial crisis high. We also upgrade our 12-month forecast to 10.30, though our conviction is much higher for the three months view. We remain firmly bearish on the currency and continue to struggle to find good reasons (bar valuation) to own the krona.”
“We recognise that the currency currently looks oversold on a short term basis, be it based on the relative strength index or our short-term financial fair value model. Hence, some EUR/SEK stabilisation over the near term is likely before renewed appreciation in the second quarter this year.”
Author
Sandeep Kanihama
FXStreet Contributor
Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.
