EUR/SEK points to 10.30 on a three-month view – Rabobank

Analysts at Rabobank see the EUR/SEK pair moving back to 10.30 on a three-month view. They warn the forecast is dependent on developments around Russia and the response to Sweden's membership bid to join NATO. 

Key Quotes: 

“The 25 bps rate hike from the Riksbank at the end of last month had little lasting impact on the value of the SEK vs. the EUR. Having failed to hold below the 200 day sma, EUR/SEK bounced higher into early May, with the SEK only claiming back some ground in recent sessions on the back of stronger than expected Swedish CPI inflation data.”

“Given the risk that the window of opportunity for the ECB to hike rates may prove to be narrow due to recessionary fears in the Eurozone, we see scope for EUR/SEK to adjust moderately lower on a 3 to 6 month below. This view, however, is dependent on whether investor confidence is impacted by developments in the relationship between Russia and Sweden given the latter’s decision to move away from its neutral position.”

“The market will be looking for more clarity from the Riksbank about the outlook for its balance sheet.”

“The Riksbank concluded its bond buying programme last year but is currently still reinvesting proceeds. The next policy meeting is scheduled for June 30. We see EUR/SEK moving back to 10.30 on a 3 month view.”