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Macroeconomic data has allowed the Riksbank to avoid criticism after the December interest rate hike, Rabobank reports.

Key quotes

“The SEK was briefly the best performing G10 currency on a 1-day view this morning, supported by the better than expected outcome for January manufacturing PMI data (at 51.5) which was released earlier in the week.”

“Growth is expected to strengthen next year to 1.6%, although this is below the previous forecast of 1.4%.”

“CPI inflation has been close to the Riksbank’s target of 2% for a prolonged period.”

“In our view, there is scope for the USD to remain relatively firm vs the SEK in the months ahead. While any further stabilisation in domestic Swedish economic data has the potential to push EUR/SEK moderately lower in the coming months, we would expect the 10.40 area to offer strong support.”