SEK remains a key focus for Riksbank

Riksbank had delivered a significant expansion of QE in their October meeting, since then SEK is steady on trade weighted basis and EUR/SEK is lower. Despite a dovish tone by Riksbank board, this took place, and recent allusions of direct FX intervention possibly prevent SEK strength.

SEK is pulled both the sides by Swedish economy's positive developments and Riksbank and ECB policy through the year, especially from the time ECB has announced QE, and it seems that the year's ending would be same as it started.

"The ECB is preparing to reload its policy weapons in December, and the Riksbank will likely counter with another small rate cut of 10-15bp, contingent of course on the form of the new ECB package and the reaction in FX", says Bank of America in a research note.

Swedish economy is positvely performing, also backed by policy and getting support from a rise in Eurozone- Sweden's main trading partner, it will become strong to decrease the strength of accomodation.

Less proactive policy stance in future should allow the currency to appreciate slowly versus Euro, and Riksbank's tightening is likely to remain well.

"SEK remains a key focus for the Central Bank, however, so sharp appreciation will not be welcomed. On the topic of intervention, while we do not rule out intervention to smooth sharp SEK appreciation, we do not expect sustained intervention or an SNB-style peg", added Bank of America.