FXStreet (Edinburgh) – Senior Currency Strategist at Rabobank Jane Foley reviews today’s decision by the Riksbank.
Key Quotes
“The surprise policy moves from the Riksbank over the past year in addition to its verbal intervention have been instrumental in lending EUR/SEK support over this period”.
“Despite the broad based weakening of the EUR at the start of this year on the back of the ECB’s QE programme, the value of EUR/SEK has remained relatively well supported”.
“The Riksbank, however, appears unwilling to take any chances with the exchange rates in light of its struggle with deflation and given the importance of the export sector to its economy”.
“While lack of liquidity means that the SEK cannot be a true safe haven, there is risk that the SEK could benefit from diversification trades on the event of downside pressure on the EUR caused by Greek uncertainty”.
“Indeed the SEK was the best performing G10 currency during the month of June. Today’s rate cut suggests that the Riksbank is taking out insurance against further SEK inflows”.
(Market News Provided by FXstreet)