EUR/SEK retreated from the all-time highs over the past month. Economists at CIBC Capital Markets analyze the pair’s outlook.
The SEK remains undervalued
We would regard the SEK as remaining materially undervalued in PPI terms versus the EUR.
The high beta status of the currency points towards further SEK gains should global monetary policy tightening appear to have largely run its course.
Should the Riksbank be nearing the end of the tightening cycle this would help mitigate ongoing real estate headwinds. Anecdotal housing market evidence suggests negative sentiment is dissipating.
EUR/SEK – Q3 2023: 11.45 | Q4 2023: 11.04
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