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SEK: Unwinds A Portion Of Yesterday's Post-Riksbank Strength

SEK
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SEK has unwound a portion of yesterday’s post Riksbank strength, with EURSEK up 0.3% and NOKSEK 0.5% higher. Soft European equities will also be weighing on the risk-sensitive krona.

  • NOKSEK fell 1.4% yesterday (the joint largest one-day move lower this year), but was unable to register a clear breach of the trendline drawn from the August 5 high (0.9639).
  • However, the cross remains below 0.9700, with a recovery back towards 0.9800 required to ease bearish conditions.
  • Although yesterday’s Riksbank decision was more cautious/hawkish than expected, we continue to believe the Executive Board will be happy to cut rates below 2.25% if justified by the incoming data. Our full Riksbank review is here
  • SEB’s month-end rebalancing model notes that typical Swedish portfolio managers will need to sell SEK in December. However, their quarterly and yearly models instead point to SEK buying needs. 
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SEK has unwound a portion of yesterday’s post Riksbank strength, with EURSEK up 0.3% and NOKSEK 0.5% higher. Soft European equities will also be weighing on the risk-sensitive krona.

  • NOKSEK fell 1.4% yesterday (the joint largest one-day move lower this year), but was unable to register a clear breach of the trendline drawn from the August 5 high (0.9639).
  • However, the cross remains below 0.9700, with a recovery back towards 0.9800 required to ease bearish conditions.
  • Although yesterday’s Riksbank decision was more cautious/hawkish than expected, we continue to believe the Executive Board will be happy to cut rates below 2.25% if justified by the incoming data. Our full Riksbank review is here
  • SEB’s month-end rebalancing model notes that typical Swedish portfolio managers will need to sell SEK in December. However, their quarterly and yearly models instead point to SEK buying needs.