Sell rallies in EUR/SEK – TDS

FX Strategists at TD Securities have recommended selling EUR/SEK on occasional rallies.

Key Quotes

“The Riksbank is still balancing stronger economic growth with fears of currency appreciation and not wanting to get too far ahead of the ECB in thinking about tightening policy. So shifts in stance will be very slow. The Norges Bank will be faced with a further drop in core inflation, perhaps below 1% this summer, meaning we can’t entirely rule out further easing in Norway”.

“We continue to see two-way risks vs the EUR for both the SEK and NOK. EURNOK will remain highly sensitive to oil prices as lagging inflation pressures in Norway keep the Norges Bank on a dovish footing. We prefer to sell EURSEK on rallies despite a still-dovish Riksbank as the Swedish economy remains on solid footing”.