EUR/SEK does not rule out extra downside – Danske Bank

The Swedish Krona could extend its appreciation further in the next weeks, according to Christin Tuxen, Chief Analyst at Danske Bank.

Key Quotes

“We wouldn’t be surprised if EUR/SEK continues to go lower from here. The nutty thing however is that if the SEK appreciates too fast, the likelihood for a hike this year will come down again, i.e. a circular reference”.

“We see the spike towards the 10.69 levels as overshooting and as such the correction we are now seeing makes sense. Since rates (EUR-SWE) have come down too, the cross is still expensive relative to rates-implied short-term models (10yrs at around 10.15). But, basically, we think that we have seen the peak in EUR/SEK for now”.