17 Jul 2014
EUR/SEK and EUR/NOK forecasts revised – Danske Bank
FXStreet (Edinburgh) - In light of the recent price action and following the outcome of both the Riksbank and Norges Bank meetings, analysts at Danske Bank have revised the forecasts for EUR/SEK and EUR/NOK.
Key Quotes
“We now target EUR/SEK at 9.40 in 1M ( was 9.00) reflecting that to some extent near-term upside risks in EUR/SEK can still be seen, even though we have emphasised that a thin July market has not been an argument for a weaker SEK historically”.
“In three months’ time we expect the krona to have gained some momentum and see EUR/SEK at 9.20 (8.90)”.
“From a medium- to long-term perspective, PPP, current account, public finances, growth outlook etc unambiguously suggest that the krona will appreciate over time”.
“However, we also acknowledge that rate differentials have become less SEK supportive, or even SEK negative (versus, for example, NOK). We have therefore also raised our 6M and 12M targets and now project a gradual decline in EUR/SEK to 9.00 (8.8) and 8.80 (8.70) in six and 12-months’ time respectively”.
“Over the past month, the NOK has been the biggest loser among G10 and consequently we have revised up our short-term EUR/NOK targets”.
“We now target EUR/NOK at 8.40 in 1M (8.20) and 8.20 in 3M (8.00)”.
“In general we do not expect the Norwegian economy to weaken further and trigger a rate cut from Norges Bank”.
“Hence, in the medium to long term we still expect EUR/NOK to edge lower towards 7.85 in 12M (unchanged)”.
Key Quotes
“We now target EUR/SEK at 9.40 in 1M ( was 9.00) reflecting that to some extent near-term upside risks in EUR/SEK can still be seen, even though we have emphasised that a thin July market has not been an argument for a weaker SEK historically”.
“In three months’ time we expect the krona to have gained some momentum and see EUR/SEK at 9.20 (8.90)”.
“From a medium- to long-term perspective, PPP, current account, public finances, growth outlook etc unambiguously suggest that the krona will appreciate over time”.
“However, we also acknowledge that rate differentials have become less SEK supportive, or even SEK negative (versus, for example, NOK). We have therefore also raised our 6M and 12M targets and now project a gradual decline in EUR/SEK to 9.00 (8.8) and 8.80 (8.70) in six and 12-months’ time respectively”.
“Over the past month, the NOK has been the biggest loser among G10 and consequently we have revised up our short-term EUR/NOK targets”.
“We now target EUR/NOK at 8.40 in 1M (8.20) and 8.20 in 3M (8.00)”.
“In general we do not expect the Norwegian economy to weaken further and trigger a rate cut from Norges Bank”.
“Hence, in the medium to long term we still expect EUR/NOK to edge lower towards 7.85 in 12M (unchanged)”.