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The research team at Danske Bank point out that yesterday, the Riksbank announced it plans to add NOK and DKK to its currency reserve portfolio, meanwhile indicating it will raise USD exposure and reduce EUR exposure.

Key Quotes

“The change in composition is set to take place in Q1 19. The new investment policy is motivated by a need for contingency and aims to capture better the short-term funding needs of the Swedish banks.”

“This will imply USD, NOK and DKK buying and EUR selling. However, we do not expect this to have any material impact on the market, as the amounts are still negligible relative to total market turnover.”