EUR/SEK leaps to session highs post-Riksbank, around 9.70

The Swedish Krona is quickly depreciating vs. its European peer on Tuesday, now taking EUR/SEK to the boundaries of the 9.7000 handle, or daily peaks.

EUR/SEK higher on steady Riksbank

SEK has gathered extra selling pressure after the Riksbank left unchanged its repo rate at -0.50%, broadly in line with initial estimates.

The Riksbank noted that activity remains solid and domestic inflation is approaching the 2% target. However, the central bank argued that further expansionary monetary policy is needed for consumer prices to stabilize around the 2% goal.

The Nordic central bank also added that the purchase of government bonds will continue during the second half of the year (in line with April’s decision), while the tightening cycle is not expected to start until the middle of next year.

The Riksbank now sees the economy expanding at an annualized 2.2% this year (vs. 2.8% prev.) and 2.4% in 2018 (vs. 2.3% prev.). Inflation figures tracked by the CPI have been revised lower to 2.0% in 2018 (from 2.1%).

The cross has quickly jumped to 3-day tops near 9.70, although it retraced part of the up move afterwards. It keeps, however, the positive note for the second straight session after bottoming out around 9.61 on Friday, or 2-month lows.

EUR/SEK levels to consider

As of writing the cross is losing 0.09% at 9.6570 and a breakdown of 9.6331 (100-day sma) would expose 9.6104 (low Jun.30) and then 9.6031 (50% Fibo of the 2017 up move). On the upside, the immediate barrier is located at 9.7083 (55-day sma) seconded by 9.7417 (21-day sma) and finally 9.8067 (high Jun.28).