Menu

Search

  |   Commentary

Menu

  |   Commentary

Search

Swedish krona likely to witness gradual uptrend vs euro on slower monetary policy normalization, says Commerzbank

The Swedish krona is expected to witness a gradual upward trend vs the euro, on expectations of a slower normalization in the country’s monetary policy, although the process is seen to happen at a rate faster than that in the Eurozone, according to the latest research report from Commerzbank.

Admittedly, Swedish inflation figures for October were lower than expected. And yes, the inflation trend in Sweden has reversed. But the economy is booming and the unemployment rate is trending downwards, which suggests that wages will rise in the medium term.

Therefore, the Riksbank won’t reconsider its stance due to one single inflation number. By now, the market has almost completely priced in a rate hike before the end of the year.

Recent rather hawkish comments by the members of the Executive Board signal this as well. Conversely, this means that an interest rate hike in December will not lead to an excessive SEK appreciation, as the market is prepared for it. All the more reason for the Riksbank not to hesitate any longer.

"With EUR/SEK levels around 10.20-30, the Riksbank can certainly live well without having to fear a too strong krona, which could exert downward pressure on inflation again. Especially as it will clearly communicate that further interest rate steps will follow only very slowly," the report added.

  • ET PRO
  • Market Data

Market-moving news and views, 24 hours a day >

December 17 07:00 UTC Released

TRIndustrial Prod Adj YY

Actual

-5.7 %

Forecast

-4 %

Previous

-2.7 %

December 17 07:00 UTC Released

NOTrade Balance

Actual

26.2 0

Forecast

Previous

34.9 0

January 31 00:00 UTC 461262461262m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 461262461262m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 22 19:00 UTC 473082473082m

ARTrade Balance

Actual

Forecast

Previous

-1541 %

January 31 00:00 UTC 461262461262m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 22 19:00 UTC 473082473082m

ARTrade Balance

Actual

Forecast

Previous

-1541 %

January 31 00:00 UTC 461262461262m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 461262461262m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 461262461262m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

Close

Welcome to EconoTimes

Sign up for daily updates for the most important
stories unfolding in the global economy.