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19 May 2015
EUR/SEK within range, Riksbank on hold – Danske Bank
FXStreet (Edinburgh) - Senior Analyst at Danske Bank Signe Roed-Frederiksen sees the cross navigating within 9.20 and 9.40 for the time being.
Key Quotes
“The SEK was in focus yesterday amid the Riksbank’s ‘non-policy’ meeting and the disappointing inflation print last week (in March the Riksbank surprised markets by easing monetary policy at a similar meeting)”.
“We did not get a rate cut nor a statement from the Riksbank policymakers after the meeting, which consequently sent EUR/SEK lower by roughly 6 figures”.
“With no new inflation print before the 11 June and with yesterday’s decision in mind, this leaves the next board meeting on 1 June a non-event”.
“That is of course only if EUR/SEK does not drop significantly before then”.
“According to our models the short term fair value estimate for EUR/SEK is 9.30. In our view, there is no EUR/SEK pain threshold under which the Riksbank will step in”.
“Rather it may do so if the SEK was to appreciate too fast but we do not think that the Riksbank is under any significant ‘currency stress’ as long as the pair continues to fluctuate between 9.20-9.40”.
Key Quotes
“The SEK was in focus yesterday amid the Riksbank’s ‘non-policy’ meeting and the disappointing inflation print last week (in March the Riksbank surprised markets by easing monetary policy at a similar meeting)”.
“We did not get a rate cut nor a statement from the Riksbank policymakers after the meeting, which consequently sent EUR/SEK lower by roughly 6 figures”.
“With no new inflation print before the 11 June and with yesterday’s decision in mind, this leaves the next board meeting on 1 June a non-event”.
“That is of course only if EUR/SEK does not drop significantly before then”.
“According to our models the short term fair value estimate for EUR/SEK is 9.30. In our view, there is no EUR/SEK pain threshold under which the Riksbank will step in”.
“Rather it may do so if the SEK was to appreciate too fast but we do not think that the Riksbank is under any significant ‘currency stress’ as long as the pair continues to fluctuate between 9.20-9.40”.