Economists at Danske Bank forecast EUR/SEK at 10.00 in three months but as the weak inflation outlook remains a headwind to the krona, the EUR/SEK pair is expected to soar to 10.30 in 12 months.
Key quotes
“If the UK strikes a Brexit deal, that would prove a SEK tailwind. Given the worrisome inflation outlook, we believe it will be difficult for the Riksbank to accept a continuation of the multi-month SEK trend in 2021 without taking action, beyond QE. Hence, we maintain our view that the Riksbank will be a headwind for the SEK as we move into 2021.”
“We deem the SEK as fairly valued. On balance, we twist the trajectory by lowering one month and three months to 10.10 and 10.00, respectively (previously 10.30) and raise six months and 12 months to 10.20 and 10.30, respectively (previously 10.10).”
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