EUR/SEK: Days of glory has gone – Danske Bank

The multi-year period of a higher EUR/SEK has ended, according to Thomas Harr, PhD, Global Head of FI&C Research at Danske Bank. The EUR/SEK pair is trading at 10.58240.

Key quotes

“The tentative stabilisation in the German economy should support the Swedish cycle, although the coronavirus implies that uncertainty has risen, and the trajectory will likely be more volatile.” 

“Domestic demand in Sweden appears to be stabilising (albeit at weak levels) supported by rising house prices, which together with higher real policy rates should support capital inflows.”

“The more constructive backdrop for the SEK could change if the Riksbank reacted to the lower inflation we project, but that is not our base case.”