The positive EUR/SEK trend witnessed over the last eight years might have come to an end, according to the FX analysis team at Rabobank, that sees the euro aiming to 10.30 ad drifting lower on the mid-term.
Key quotes
“In recent weeks a consensus has been building that the Swedish economy will suffer a less severe fall out from the covid-19 crisis than either the EU or the US. The obvious assumption is that the lack of a formal lockdown in Sweden this year helped protect aspects of the economy, though the cost was a heavier death toll than its neighbours.”
“One potential concern for the Riksbank is that there are signs that the upward trend in EUR/SEK that persisted between 2012 and the start of this year is showing signs of reversing. This is likely to reinforce the dovish rhetoric from the central bank. While the Riksbank is likely to continue talking down the value of the SEK through its reference to policy options, we expect to see EUR/SEK10.30 on a 3-month view and for the currency pair to drift lower medium-term.”
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