Danske Bank suggest that "the, at least....>

EURO-SEK: Danske Bank suggest that "the, at least from our standpoint, somewhat

surprising decision from the Riksbank to keep the rate path intact at the July

meeting has added to the recent trend for a stronger SEK. Despite soft messages

and lingering cuts from the Fed and the ECB, the Riksbank stubbornly maintains

its hiking bias, motivated by well-anchored inflation expectations and actual

inflation in line with its forecasts. In the near term, this might lend the SEK

some support. However, we strongly doubt that the Riksbank will be able to

deliver a hike this year or even next year. When cuts from the Fed and/or ECB

materialise, we believe the Riksbank will have no other choice than to abandon

its hopes of 'policy normalisation' for now. Thus, we deem our medium-term

outlook for the SEK to be fundamentally unchanged and correspondingly keep our

forecast profile intact at SEK10.50 (1 month), SEK10.70 (3 month), SEK10.80 (6

month) and SEK10.90 (12 month). However, broad-based USD weakness may send

USD/SEK (and by extension EUR/SEK) much lower than suggested by our forecasts."