The Swedish Krona could extend its appreciation further in the next weeks, according to Christin Tuxen, Chief Analyst at Danske Bank.
Key Quotes
“We wouldn’t be surprised if EUR/SEK continues to go lower from here. The nutty thing however is that if the SEK appreciates too fast, the likelihood for a hike this year will come down again, i.e. a circular reference”.
“We see the spike towards the 10.69 levels as overshooting and as such the correction we are now seeing makes sense. Since rates (EUR-SWE) have come down too, the cross is still expensive relative to rates-implied short-term models (10yrs at around 10.15). But, basically, we think that we have seen the peak in EUR/SEK for now”.
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