EUR/SEK to move back towards the 10.40-10.50 range – Rabobank

The SEK responded to the Riksbank’s dovish commentary by dropping lower vs the EUR. However, with Sweden’s 2020 GDP growth outlook looking better than  |  29/09/2020 07:53

The SEK responded to the Riksbank’s dovish commentary by dropping lower vs the EUR. However, with Sweden’s 2020 GDP growth outlook looking better than most of its peers, economists at Rabobank question whether this weaker tone can be sustained vs. the EUR. They forecast the EUR/SEK pair trading back to the 10.40-10.50 in the coming months.

Key quotes

“At last week’s policy meeting, the Riksbank forecast 2020 CPI inflation at just 0.6% y/y and the unemployment rate at a hefty 8.6%. In both cases the forecasts were a little better than the projections contained in the Riksbank’s July Monetary Policy Report. That said, they clearly paint a weak economic outlook. Faced with this backdrop, the forward guidance offered by policy-makers was very dovish in tone.”

“The Riksbank revised its 2020 GDP projections last week. For the year as a whole GDP is expected to contract by -3.6%. This compares with a forecast of -4.5% made in July. Next year’s growth forecast has been revised higher to 3.7% from a previous forecast of 3.6%.”

“Insofar as domestic CPI inflation is well below the 2.0% y/y inflation target and with unemployment high particularly among the young high, there would appear little chance that the Riksbank will back away from its QE and liquidity programmes any time soon. That said, given the Riksbank’s previous concerns about negative rates, we don’t see a decision in that direction for the time being.”

“We expect a move back towards the EUR/SEK 10.40/10.50 range in the coming months.”

 

Share

Popular News

Show More Popular News

Market Insight's Views

Market Insight analyses will provide both fundamental and technical comprehensions on FX
and other asset classes for Market Insight viewers

RISK WARNING

The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice.

If such information is acted upon by you then this should be solely at your discretion and GKFX will not be held accountable in any way.

  • ForexF
  • IndicesI
  • CommoditiesC
        Back

        Login to Market Insight Account

        Your Market Insight account gives you access to the tools that we offer our customers including our
        Technical Studies & Sentiment for your accounts.

        Forgot Password?

        Don't you have a Market Insight account? With a few easy steps you can easily register to Market Insight

        Create a Market Insight's Account

        Your Market Insight account gives you access to the tools that we offer our customers including our Technical Studies & Sentiment for your accounts.

        register_ty

        Thank you!

        Welcome to Market Insight family!

        You have succesfully completed the registration.
        We will send you an e-mail to give you some
        instructions and our Terms and Conditions!
        Our account representatives will be contacting you as
        soon as possible. If you have any further questions
        please do not hesitate to mail us via info@marketinsight.com