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EUR/SEK pair likely to trade around 9.80 by end-2019, says Lloyds Bank

Swedish krona has fluctuated in a narrow range against the euro since the mid-October 2018. Fundamentally, little has changed in December to alter the bias for EUR/SEK to fall further in the months ahead, said Lloyds Bank in a research report. While some indicators of activity had weakened, the central bank had tightened its monetary policy in December by hiking rates by 25 basis points. However, it kept its rates on hold during its meeting in February. Meanwhile, the market expects the Riksbank to further tighten the policy later in 2019, mostly in the third quarter.

“Given that domestic sentiment remains relatively buoyant, an improvement in the external environment could bring forward Swedish rate expectations”, said Lloyds Bank.

Current guidance from the ECB implies that policy rates will be on hold “through the summer”. Beyond that point, it is possible that the central bank will slowly begin to hike policy rates.

“We expect a 10bp increase in the deposit rate in December. Even so, compared to the euro area, Swedish policy normalisation looks likely to occur at a faster pace. As such, we forecast EUR/SEK to fall towards 9.80 by the end of the year”, added Lloyds Bank.

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March 26 04:00 UTC Released

THManufacturing Prod YY

Actual

-1.6 %

Forecast

0.52 %

Previous

0.18 %

March 25 21:45 UTC Released

NZTrade Balance YY

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-6.62 Bln NZ

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-6.36 Bln NZ

January 31 00:00 UTC 603608603608m

ARAnnual Primary Balance*

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2016 bln ARS

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2016 bln ARS

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January 22 19:00 UTC 615428615428m

ARTrade Balance

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-1541 %

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ARAnnual Primary Balance*

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2016 bln ARS

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Bln AR bln ARS

January 22 19:00 UTC 615428615428m

ARTrade Balance

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-1541 %

January 31 00:00 UTC 603608603608m

ARAnnual Primary Balance*

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Forecast

2016 bln ARS

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Bln AR bln ARS

January 31 00:00 UTC 603608603608m

ARAnnual Primary Balance*

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Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 603608603608m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

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