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SEK Slides as Markets Look to Soft Rate Path

FOREX
  • The greenback sits stronger ahead of NY hours, although the USD Index holds below the 110.00 handle for now. The Monday/Friday highs at 110.175/110.260 provide first resistance on any move higher.
  • GBP also trades favourably, turning EUR/GBP back to the 0.8750 level and within range of the 0.8682 support, marking the 23.6% retracement for the Auguust - September upleg.
  • Elsewere, SEK trades softer and toward the lower end of the G10 table following the Riksbank decision this morning. The bank raised rates by 100bps, however a dovish lean to the projected rate path worked against the currency, putting EUR/SEK at new multi-month highs to touch 10.8364, the highest level since mid-March.
  • The decision sees smaller Riksbank hikes going forward, with a 50bps hike now seen in November - down from a 75bps forecast previously.
  • Canadian CPI is on the docket Tuesday, with markets expecting Y/Y prices to slow to 7.3% from 7.6% previously. US housing starts and building permits are also due to cross. ECB's Lagarde is due to speak, speaking in Frankfurt after the European close.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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