EUR/SEK looks to 9.50 near term – Danske Bank

EUR/SEK seen grinding lower to 9.50 within a month’s view, suggested Arne Rasmussen, Chief Analyst at Danske Bank.

Key Quotes

“Yesterday’s super-strong Swedish manufacturing PMI sent EUR/SEK temporarily below the 9.52 level but the cross actually reversed losses in afternoon trading. Indeed, the last thing the Riksbank needs right now is inflation headwinds from SEK strength, not least after the latest round of subdued wage deals, which strengthen further our case that domestic costs are not consistent with a sustained inflation rate of 2%”.

“The next SEK focal point will be the CPI print due on 11 April, which we think will add pressure for the central bank to think twice about phasing out stimulus. In the meantime, note that the month of April sees the lion’s share of Swedish corporate dividends paid out, which could generate SEK outflows. We continue to target EUR/SEK ay 9.50 in 1M”.