EUR/SEK to rebound to the 11.30 area or higher before a longer-term decline can materialise – ING

EUR/SEK broke decisively through the 11.20 area this week. Economists at ING analyze the pair’s outlook.

A strong week, but will it last?

The stronger-than-expected headline CPIF in Sweden, some stickiness in long-term inflation expectations and the global equity rally have all contributed to a strong week for the Krona. Our short-term view on SEK is, however, not as rosy. 

Risk sentiment might struggle to keep fuelling rallies in high-beta currencies like SEK in the next couple of weeks. 

The end of FX sales means the downside could be rather slippery for the Krona. 

We still see EUR/SEK rebound to the 11.30 area or higher before a longer-term decline can materialise.