17 Mar 2015
SEK poised for further upside? – JP Morgan
FXStreet (Edinburgh) - The Swedish krona could gather further traction in the upcoming periods, suggested analysts at JP Morgan.
Key Quotes
“The case for a positive re-pricing of SEK remains broadly intact, since core and underlying inflation is slowly ticking higher (CPI exceeded expectations for the third consecutive month in February) and the economy is well-placed to benefit from the pronounced depreciation in the currency over the past year (-15% trade-weighted) as well as stronger growth in the euro area (Sweden is highly levered to global growth in general and Euro area growth in particular)”.
“However, the Riksbank will not want to relinquish the inflationary-benefits of a weaker currency too quickly, hence the onset of more overt currency jawboning as EUR/SEK approached 9.00”.
“That being said, it’s worth noting that the SEK TWI is in-line with the Riksbank’s projections for 1Q, and still 3% weaker than the central bank sees for the end of the year”.
“We are primed to re-buy SEK on a more pronounced position squeeze”.
Key Quotes
“The case for a positive re-pricing of SEK remains broadly intact, since core and underlying inflation is slowly ticking higher (CPI exceeded expectations for the third consecutive month in February) and the economy is well-placed to benefit from the pronounced depreciation in the currency over the past year (-15% trade-weighted) as well as stronger growth in the euro area (Sweden is highly levered to global growth in general and Euro area growth in particular)”.
“However, the Riksbank will not want to relinquish the inflationary-benefits of a weaker currency too quickly, hence the onset of more overt currency jawboning as EUR/SEK approached 9.00”.
“That being said, it’s worth noting that the SEK TWI is in-line with the Riksbank’s projections for 1Q, and still 3% weaker than the central bank sees for the end of the year”.
“We are primed to re-buy SEK on a more pronounced position squeeze”.