EUR/SEK risks further upside on Riksbank easing – Danske Bank

Mikael Milhoj, Senior Analyst at Danske Bank, noted there is still room for further upside in the cross via a potential rate cut by the Riksbank in the next months.

Key Quotes

“In the Scandies, the SEK recovered yesterday as risk appetite improved”.

“Although it could be argued that the probability of a Riksbank rate cut has declined after the recent rally in EUR/SEK, we still expect the Riksbank to announce both more QE and a rate cut in December”.

“A rate cut does not seem to be priced at all in Sweden and we still see risks skewed to the upside for EUR/SEK in the near term”.

“Indeed, a further rally in global equities is likely to support the SEK and given the fact that the SEK is very weak already suggests the upside potential is not significant”.