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EUR/SEK bearish ahead of the Riksbank meeting – Danske Bank

FXStreet (Edinburgh) - Jens Pedersen, Senior Analyst at Danske Bank, expects the SEK to lose ground in the very near term, albeit keeping the 9.30-9.60 range in the longer run.

Key Quotes

“The market is pricing in around 4bp of rate cut for the Riksbank meeting on Thursday”.

“We see an increasing risk of a Riksbank cut although our base case is for unchanged interest rates”.

“In any case, the Riksbank will be very dovish and likely lower its inflation forecasts”.

“The ECB will also be dovish on 3 September but it may be less dovish than the Riksbank”.

“Hence, risks may be biased slightly in favour of a higher EUR/SEK on Thursday”.

“However, we see value in SEK as it is fundamentally cheap. Hence, we remain short EUR/SEK in our FX Trading Portfolio but we will be tactical in managing the position within the expected EUR/SEK range of 9.30/9.60”.

http://www.fxstreet.es/analisis/el-escner-del-da/2015/08/31/

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