SEK stays vigilant on politics – Danske Bank

Senior Analyst at Danske Bank Mikael Milhoj noted the political scenario in Sweden would be key in determining SEK’s price action in the near term.

Key Quotes

“Yesterday, the Riksdag selected the Moderate Andreas Norlén as Speaker, giving him the mandate of trying to form a government”.

“Today, Stefan Lofven is likely to lose a vote of ‘no confidence’, paving the way for an Alliance government. The key question remains how the Swedish Democrats will use its role as kingmaker”.

“If things go smoothly, a Prime Minister could be elected soon and if so, the political risk premium on the SEK should be reduced further. If a PM is not accepted after four attempts, an extra election must be held. In this less likely scenario, the SEK should come under renewed pressure”.