EUR/SEK still faces upside risks – Danske Bank

The Swedish Krona is expected to remain under pressure in the next weeks, according to Valtteri Ahti, Chief Strategist at Danske Bank.

Key Quotes

“EUR/SEK is trading close to our mid-November 10.40 target, but we still see upside risks dominating near term”.

“Yesterday, Mr Löfven gave up his attempts to form a government. The speaker will now meet with the parties in gatherings, which will hopefully end with a proposal before the Riksdag in coming weeks. Sweden may have a new government this year if the positions are unlocked. However, the risk of a snap election is still real – a potential headwind for the krona”.

“Through year-end, we expect the SEK to rebound as the Riksbank’s first hike in seven years draws closer. Today, we get wage data from the Mediation Office, which will be interesting but should not affect either the December decision nor be a market mover”.