EUR/SEK shed 104 pips overnight and last...>

EURO-SEK: EUR/SEK shed 104 pips overnight and last trades at SEK10.4396. The

rate tested support from the Dec 12 low of SEK10.4355, but struggled to breach

the level and ticked away from there. The krona firmed up on the back of

year-end seasonality and positioning ahead of the upcoming monetary policy from

the Riksbank. Analysts expect Sweden's central bank to bring its policy rate

back to 0% by delivering a 25bp rate hike this week.

- The rate operates at its worst levels since April, limited to the downside by

the aforementioned SEK10.4355 level & the 61.8% retracement of the Dec 31 - Oct

10 high rally at SEK10.4347. A fall below would clear the way to the SEK 10.4000

mark. Convversely, bulls need to retake the breached support zone from a series

of previous lows at SEK10.4855-97 before taking aim at the 50% retracement of

that Dec 31 - Oct 10 bull mkt at SEK10.5301.

- The Riksbank's monetary policy decision is awaited on Thursday, will be

followed by a press conference. Elsewhere, Swedish Economic Tendency Survey is

due on Wednesday, while retail sales and PPI hit on Friday.