EUR/SEK could attempt a test of 10.00 near term – Danske Bank

Chief Analyst at Danske Bank Jens Sorensen believes the Swedish Krona could depreciate towards the psychological 10.00 handle in the short term.

Key Quotes

“In Scandies, EUR/SEK remains bid after the break of the 9.80 level and given the already relatively steep Swedish yield curve, lower-than-expected CPIF inflation and concerns about the housing market (including the likely negative spill-over to GDP growth), it is quite difficult to find SEK-positive arguments right now”.

“Hence, while EUR/SEK looks increasingly overbought both technically and according to our short-term financial valuation model, we still see risks skewed to the upside near term”.

“Looking at price actions in November last year, when EUR/SEK touched the 10.00 level, the break of 9.90 may open up for a test of the 10.00 figure in coming days”.