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Morgan Stanley entered a short USD/SEK..........>

SEK
SEK: Morgan Stanley entered a short USD/SEK position at the NY close on
Thursday, with a target of SEK7.90 and a stop at SEK9.25.
- Morgan Stanley think "SEK is undervalued and look to buy it against USD.
Indeed, SEK is the cheapest G10 currency relative to USD relative to historical
averages. Markets are pricing in too much risk premium, in our view, ahead of
the Sep 9 Swedish elections. SEK should benefit from improving fundamentals in
Europe and a rising EUR should help bring the constellation of European
currencies higher. Sweden has a record-high net foreign asset position of
SEK485bn, suggesting potential repatriation flows in the event of rising global
volatility. Risks to the trade include the Riksbank turning more dovish and the
broader economic outlook in Sweden turning more negative, weighing on SEK."
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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