Swedish krona likely to appreciate vs euro if Riksbank normalizes policy faster than ECB, says Commerzbank

The Swedish krona is expected to appreciate against the euro if the Riksbank agrees to normalize monetary policy faster than the European Central Bank (ECB), according to the latest research report from Commerzbank.

Riksbank might hike its key rate as early as December; only the vote of central bank Governor Ingves is required in addition to Henry Ohlsson and Martin Flodén (or that of two other members of the council).

Moreover the inflation rate stands above Riksbank’s inflation target at 2.4 percent. The inflation trend also remains decent although the fall of the oil price is likely to begin taking its toll.

However, the council might still be dominated by fears that the inflation trend might reverse again and that the ECB might take longer with its normalisation process so that the first rate hike will take place in February, the report added.