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EUR/SEK likely to stay in current range, to ease in 2018 – Lloyds Bank

The EUR/SEK currency pair has been trading in a range above 9.45. In spite of Sweden witnessing one of the most impressive recoveries in Europe, the Riksbank continues to hint at a sustained accommodative stance. This is underpinned by the recent inflation figures that rose below expectations in September. But at 2.1 percent, the annual pace is above the central bank’s target.

However, the Riksbank is expected to want to see additional widespread price pressure before hiking rates from the present -0.50 percent. The central bank is expected to first hike in 2018, stated Lloyds Bank in a research report.

The ECB’s policy stance is also required to be taken into consideration.  The central bank’s policy meeting this week would be of increased significance as President Draghi has stated that they will announce ‘bulk of decisions’ on QE policy.

“We forecast EUR/SEK to remain in its current range, before easing on the back of tighter monetary policy expectations in 2018”, added Lloyds Bank.

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