FXStreet (Edinburgh) – Chief Analyst at Danske Bank Arne Rasmussen believes the Riksbank could lower its benchmark rate by 10 bp at its December meeting.
Key Quotes
“The Riksbank meeting showed just how additional easing can be interpreted hawkish by FX markets as the Riksbank’s decision to lower the short-end of its KIX-projection (i.e. stronger SEK) suggested a higher tolerance for a somewhat stronger SEK in the near term”.
“Yet overall, the Riksbank still emphasised the importance of fighting SEK-strength – especially if the appreciation is driven by easier monetary policy from other central banks (not least the ECB)”.
“With respect to the SEK we do not consider yesterday’s announcement to be a game-changer as such and we maintain our call for a December rate cut of 10bp”.
“We also still think that 9.30-9.60 remains a fair range to play for EUR/SEK, albeit with a bias to the lower end of the range”.
(Market News Provided by FXstreet)