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ING analysts are expecting the SEK to be a laggard in the G10 FX cyclical space next year and, within the region, but prefer NOK.

Key Quotes

“Even after rate hike, the SEK implied yield will remain the lowest among G10 cyclical currencies, the real yield is very negative, and the domestic economic and inflation outlooks  remain challenging.”

“Although SEK is deeply undervalued on a medium term basis, so are the likes of NOK, NZD or AUD. This, in turn, suggests no meaningful relative advantage for the krona. Hence, on the carry-valuation matrix, SEK doesn’t stand out. In fact, the currency lags its peers.”

“Our profile for EUR/SEK for 2020 is very flat, with limited upside and downside to the cross. We expect the cross to hover around the current levels for most of 2020.”