The near-term outlook is SEK supportive and economists at Danske Bank expect the EUR/SEK pair to be at 10.00 in three months, before monetary policy divergence weighs on SEK in the seconf half of the year.
Key quotes
“The global recovery is set to continue in 2021, at a slower pace but with different implications for central banks. We expect to see markets starting to price in monetary policy divergence (to some extent they already have), although we do not believe it will be a straight line.”
“We expect the Fed and Norges Bank to be relative frontrunners, with the ECB and Riksbank relative laggards. Actually, we see room for pricing in higher probability of a rate cut in Sweden.”
“We keep our forecast profile intact at 1M 10.10, 3M 10.00, 6M 10.20 and 12M 10.30.”
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