Compressions of yield spreads on back of the Fed’s and BoC’s 50bp reduction of their policy rates amid heightened FX volatility pose continued headwind for carry-related short SEK positions, as analysts at Danske Bank note. USD/SEK is trading at 9.477 while EUR/SEK is sitting at 10.54. Key quotes “After the recent selloff in USD/SEK the cross recovered a bit yesterday. From a Swedish perspective, the coronavirus will take its toll on activity and an already bleak outlook (yesterday the government lowered its growth estimates). It will not be reflected in the production data today, though.” “At the same time, it raises the probability for a Riksbank rate cut in our opinion. If the Riksbank would go back into negative territory, the SEK is likely to take a hit and EUR/SEK to go higher. Especially since a cut is not anticipated by, at least, the Nordic FX community.” “According to our client survey, Danske Bank’s FX Thermometer, a clear minority of the respondents sees a rate cut as the first line of defence.” FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next The Fed could cut rates further at the March meeting – UOB FX Street 2 years Compressions of yield spreads on back of the Fed’s and BoC’s 50bp reduction of their policy rates amid heightened FX volatility pose continued headwind for carry-related short SEK positions, as analysts at Danske Bank note. USD/SEK is trading at 9.477 while EUR/SEK is sitting at 10.54. Key quotes “After the recent selloff in USD/SEK the cross recovered a bit yesterday. From a Swedish perspective, the coronavirus will take its toll on activity and an already bleak outlook (yesterday the government lowered its growth estimates). It will not be reflected in the production data today, though.” “At the same time, it… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk. 4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk. 5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.
