- EUR/SEK trades without a clear direction near 10.40 on Tuesday.
- Riksbank left the policy rate unchanged at its meeting.
- Riksbank’s Ingves said the bank can expand the balance sheet if needed.
EUR/SEK now alternates gains with losses in the 10.40 region, as market participants continue to digest the recent Riksbank monetary policy meeting.
EUR/SEK unchanged on Riksbank decision
EUR/SEK is prolonging the multi-session side-lined theme so far on Tuesday, gyrating around the 100-day SMA in the 10.40 region following the Riksbank event earlier in the European morning.
In fact, the Swedish central bank left unchanged its policy rate at 0.0% on Tuesday, broadly in line with market expectations.
The central bank sees the Nordic economy recovering from the recent sharp pullback, although still amidst high uncertainty. The Riksbank now expects the economy to contract 3.6% this year and to expand 3.7% in 2021 and 2022. Regarding inflation, the CPIF (CPI at constant interest rates) is seen rising 0.6% in 2020, 1.1% in 2021 and 1.3% in 2022.
The key interest rate is seen unchanged at the current 0.0% level at least until Q3 2023.
Following the central bank’s interest rate decision, Governor S.Ingves said the balance sheet can be expanded considerably in case of need, at the time when he defended the bank’s lending programmes and the QE when comes to keep rates at low levels.
EUR/SEK levels to consider
At the moment, the pair is losing 0.02% at 10.4067 and faces the next support at 10.3447 (low Sep.18) seconded by 10.3243 (55-day SMA) and finally 10.2570 (low Aug.27). On the upside, a move above 10.4297 (monthly high Sep.21) would target 10.5461 (200-day SMA) en route to 10.5959 (monthly high Jun.19).