SEK firms on mild Riksbank guidance

John Hardy

Head of FX Strategy, Saxo Bank Group
John Hardy joined Saxo in 2002 and has been Head of FX Strategy since October 2007. He focuses on delivering strategies and analyses in the currency market as defined by fundamentals, changes in macroeconomic themes, and technical developments.

Sweden's Riksbank had a very easy task today in pushing SEK stronger. EURSEK was at key resistance up against 9.50 recently, the market was expecting nothing, and the euro was firmer after surviving the latest existential threat in Germany’s government tiff over migrants. 

Specifically, the Riksbank expressed surprise at the degree of krona weakness (suggesting that it will push back at anything approaching recent lows) and suggested that rate hikes could begin later this year (although this is unchanged). 

There were two hawkish dissensions on the rate path and on extending the mandate on FX intervention, as the two hawks Floden and Ohlsson felt this is no longer necessary.

EURSEK (daily, source: Saxo Bank)

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