Analyst at Danske Bank Mathias Mogensen notes the fair value for the cross should be between 10.20 and 10.30.
Key Quotes
“EUR/SEK was pushed higher yesterday partly from ‘risk off’ and partly from the Riksbank’s Financial Stability report. The Riksbank was clearly more worried about the housing market this time, and we still think it underestimates the impact on growth”.
“In addition, signs of weakness in the eurozone PMI are not helpful for the SEK either as this not only suggests that the ECB may adjust its rhetoric, but also reduces a cushion for the Swedish economy when the housing market hits”.
“Thursday is quiet in terms of Swedish tier 1 market movers (PPI is the only release) so EUR/SEK will take direction from global developments. Our short-term model estimates have been quite wobbly recently but basically suggest that 10.20-10.30 is close to neutral”.
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