Stronger SEK increasing concern for Riksbank

As far as Riksbank is concerned the question arises if and when it may take further monetary policy steps. So far it had very clearly pointed out that a strong krona would provide a reason to ease monetary policy as the exchange rate of course has a major effect on inflation in a small open economy like Sweden. 

As the krona has principally appreciated against EUR over the past weeks it is therefore hardly surprising that concerned comments from within Riksbank are on the up again. However, Riksbank members have been unable to stop the appreciation of the krona with their verbal interventions so far. 

"However, should today's inflation data disappoint comments from members of Riksbank are no doubt likely to become more outspoken. After all they have been fighting low inflation rates for almost three years now and are now doing everything to try and break this trend. Therefore still some limited downside potential is seen in EUR-SEK", says Commerzbank.