Riksbank’s half-hawkish walking leaves the Krona susceptible, financialexperts at ING report.
12.00+ threat stays on the table in the short-term
We desire to tension this was a missedouton opportunity for the Riksbank to materially lift SEK. The brand-new rate projections recommend another walking is not especially likely, however markets still see excellent opportunities of that being provided. Once onceagain, EUR/SEK is left to be driven by external aspects, at least till secret Swedish information are launched. This isn’t terrific news for SEK in the near term.
Another dive to 12.00 is definitely possible, and breaking above that level is likewise a really concrete danger offered international threat instability and Swedish information volatility.
We concur with the Riksbank that the shockingly underestimated Krona will eventually value and that hedging FX reserves is a excellent concept. We still believe that our 11.00 EUR/SEK target for the 2nd half of next year can be reached. However, the Riksbank missedouton another chance to insulate SEK from more short-term discomfort.