SEK strengthening again, irking the Riksbank

The trade-weighted SEK has strengthened 1.1% since April and is 2.7% away from the March level of 111.46 when the Riksbank expanded QE. Is FX intervention the next step for the Riksbank to slow the currency's advance?

Underlying CPIF inflation in Sweden surprisingly fell to 0.7% yoy in April from 0.9% in March, a four-month low. This is below the latest Riksbank forecast of 1.0% and so ups the pressure to do more to prevent inflation relapsing, according to Societe Generale.

EUR/SEK traded at a two-month low of 9.1711 in May before rebounding over 9.35. USD/SEK returned over 8.50 after falling to a low of 8.1763. The SEK is still among the cheapest currencies in the G10.