Sweden’s inflation figures launched this morning got here in much less scorching than anticipated, with headline CPIF slowing all the way down to 1.5% and the important thing core measure (CPIF excluding vitality) decelerating from 2.4% to 2.1% in December, ING’s FX analyst Francesco Pesole notes.
EUR/SEK to commerce within the 11.30-11.50 vary for many of this yr
“That additional endorses our view that the Riksbank will take charges to the two.0% mark with two back-to-back 25bp reductions on 29 January and 20 March. Markets are broadly pricing in an identical situation, that means the affect on the foreign money shouldn’t be materials.”
“Three-month historic volatility on EUR/SEK has plummeted of late and is on the lowest since 2021, a fairly welcome improvement for the Riksbank which is more likely to tolerate the pair buying and selling round 11.50 whereas nonetheless flagging the krona’s rebound potential.”
“Sweden’s sounder financial prospects in comparison with the eurozone signifies that within the occasion of Trump’s tariff menace materialising, the Riksbank shouldn’t have to chop charges as a lot because the ECB. That explains our view of a steady or modestly decrease EUR/SEK within the 11.30-11.50 vary for many of this yr.”
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