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25 Apr 2016
SEK poised for further gains – Danske Bank
Analyst at Danske Bank Matias Moguensen sees the Swesih krona picking up further pace in the next months.
Key Quotes
“The Riksbank expanded QE last week but ‘mini tapering’ in the bond-purchase programme in combination with a downward revision of the KIX forecast is, in our view, the reason why EUR/SEK actually traded lower after the announcement”.
“The QE decision means that the Riksbank intends to buy bonds at a slower pace than previously and not least in comparison with the ECB, which is doing exactly the opposite (increasing its pace)”.
“The revision of the currency forecast reflects the fact that the Swedish economy remains strong and signals an increased tolerance of further SEK appreciation”.
“We thus think there are good reasons to maintain a bullish view on the SEK: growth is relatively strong and inflation actually somewhat high, which suggest the likelihood of currency intervention has eased in our view”.
Key Quotes
“The Riksbank expanded QE last week but ‘mini tapering’ in the bond-purchase programme in combination with a downward revision of the KIX forecast is, in our view, the reason why EUR/SEK actually traded lower after the announcement”.
“The QE decision means that the Riksbank intends to buy bonds at a slower pace than previously and not least in comparison with the ECB, which is doing exactly the opposite (increasing its pace)”.
“The revision of the currency forecast reflects the fact that the Swedish economy remains strong and signals an increased tolerance of further SEK appreciation”.
“We thus think there are good reasons to maintain a bullish view on the SEK: growth is relatively strong and inflation actually somewhat high, which suggest the likelihood of currency intervention has eased in our view”.