EUR/SEK likely to fall to 9.40 by end-2018 – Lloyds Bank

In recent weeks, the Swedish krona has rallied around 2 percent after spending much of the fourth quarter of 2017 on the back foot against the euro, breaching the psychological 10.00 level in December, noted Lloyds Bank. The domestic and external environments have underpinned krona lately. Economic data continue to indicate the Swedish economy is in reasonable health. While jobless rate rose a bit to 6.5 percent, inflation is moving towards the central bank’s target.

Furthermore, the most recent Economic Tendency Survey continues to be close to its most optimistic levels in history. Meanwhile, two-year Swedish rates have traded through 2-year German rates. Moreover, speculation that the ECB might adopt a less dovish policy stance than expected might also result in a tighter policy framework from the Riksbank, stated Lloyds Bank.

“We expect EUR/SEK to decline to 9.40 by end-2018 and fall further through 2019 towards 9.10”, added Lloyds Bank.

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