- EUR/SEK drops to the 10.4900 region on steady Riksbank.
- Riksbank left the repo rate unchanged at the meeting.
- Governor Ingves sees SEK appreciating in the next months.
The Swedish Krona is extending its upside momentum vs. its European peer so far this week and is now dragging EUR/SEK to fresh 3-month lows in sub-10.4900 levels.
EUR/SEK weaker post-Riksbank decision
SEK gathered extra pace today after the Riksbank left unchanged the repo rate at -0.25% at today’s meeting, matching the broad consensus.
The Nordic central bank justified its decision on the solid pace of the domestic economy, the proximity of consumer prices to the bank’s goal, all in spite of rising uncertainty overseas.
In his speech following the event, Governor Ingves said the Scandinavian central bank is closely following the developments from both the ECB and the Fed, adding that the Krona is expected to appreciate in the next months and inflation could reach the bank’s target.
Despite the Riksbank stays on a cautious stance, it left well on the table the chance for a rate hike towards year-end.
What to look for around SEK
The Krona has been gradually appreciating since 2019 lows near 10.8500 recorded in mid-May, so far finding contention in one of the Fibo retracement in the 10.4800 region. The cautious stance from the Riksbank left the door open, however, to a potential rate hike later in the year, always on the back of solid domestic fundamentals and hopes of inflation to remain close to the bank’s target, all in spite of increasing uncertainty in the rest of the world.
EUR/SEK levels to consider
As of writing the cross is losing 0.14% at 10.5123 and faces the next support at 10.4869 (low Jul.3) seconded by 10.4453 (200-day SMA) and finally 10.4018 (61.8% Fibo of the 2019 up move). On the flip side, a break above 10.7167 (high Jun.12) would aim for 10.8008 (high May 21) and then 10.8498 (2019 high May 13).
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