EUR/SEK seen at 9.30 in 12-month – Danske Bank

Stefan Mellin, Senior Analyst at Danske Bank, believes the Swedish Krona is poised to gather traction during the next year.

Key Quotes

“We believe that the Riksbank will not only extend the QE programme in December but also cut rates. The former is widely expected and relatively SEK neutral or even positive if the focus is on tapering. However, the latter is not yet priced in and thus poses a headwind for the SEK that would send EUR/SEK higher short term”.

“Meanwhile, the global reflationary theme lends support to hard-beaten currencies such as the SEK. We also think valuation considerations could come into play. We see, not only but mainly, upside risks in EUR/SEK in the short term”.

“We still think the krona will rebound in the course of 2017. We see EUR/SEK at 9.90, 9.70, 9.40 and 9.30 in 1, 3, 6 and 12 months respectively”.