EUR/SEK expected to slip back to 9.20 in 12-month – Danske Bank

Stefan Mellin, Senior Analyst at Danske Bank, sees the Swedish Krona appreciating towards the 9.20 area in a year’s view.

Key Quotes

“We have chosen to lift our 1M target to 9.60 (prev. 9.50) ahead of the Riksbank’s April meeting, where we think it will try to avoid sending a hawkish message: a signal to end the QE program after June (hawkish tilt) is likely to come with a postponement of the first rate hike by at least one quarter (dovish tilt)”.

“The dividend season could remain a SEK headwind for the next few weeks, but this should wane in May”.

“The French election is a potential market mover depending on the outcome. In all, we expect EUR/SEK to move slowly and gradually lower over the forecast horizon, with support from strong fundamentals and valuation. We keep our 3, 6 and 12M forecasts intact at 9.40, 9.30 and 9.20”.