The Riksbank kept interest rates on hold at 4.0%, sparking a bounce in EUR/SEK. Economists at Société Générale analyze the pair’s outlook.
Riksbank prepared to raise the policy rate further if inflation prospects deteriorate
Riksbank keeps repo rate on hold at 4.0%, prepared to raise rates further if inflation prospects deteriorate, considering faster pace of bond sales in January. Repo path unchanged at 4.1% in 2024, 4.0% in 2025. New forecast 3.6% in 2026.
EUR/SEK uptrend stalled near 11.95/12.00 and it recently gave up the 200-DMA. It is near the lower limit of its range since July at 11.40. An initial bounce is taking shape however it would be interesting to see if the pair can reclaim the MA near 11.54. This break would be essential to affirm an extended rebound.
In case EUR/SEK establishes below 11.40, there could be risk of persistent down move. Next potential supports are located at projections of 11.31 and 11.19/11.16.
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