7 May 2015
EUR/SEK targets 9.10 by year-end – BAML
FXStreet (Edinburgh) - Analyst Myria Kyriacou at BAML sees the cross heading towards 9.10 by year-end.
Key Quotes
“The Riksbank kept rates on hold at -0.25% at the April 28 meeting, but expanded the bond purchase programme, adding SEK40-50bn to the SEK40bn previously announced”.
“The door has been kept open for further easing, whether through rate cuts, further QE, the proposed ‘funding for lending’ scheme or even FX interventions”.
“Persistent SEK strength or sharp moves in the currency will likely be met with verbal intervention, and the Riksbank have also demonstrated their willingness to deliver inter-meeting decisions if needed”.
“The path of SEK will likely stay a tug of war between positive developments in the Swedish economy and Riksbank and ECB policy”.
“The Swedish economy continues to perform well, and should be boosted by a pick-up in the Euro area. However the expanded QE program should maintain pressure on SEK, and EUR/SEK may find itself in a range of 9.20 – 9.40 over the shorter term. We maintain our EUR-SEK forecasts, targeting 2Q15 at 9.30, and 9.10 for year-end”.
Key Quotes
“The Riksbank kept rates on hold at -0.25% at the April 28 meeting, but expanded the bond purchase programme, adding SEK40-50bn to the SEK40bn previously announced”.
“The door has been kept open for further easing, whether through rate cuts, further QE, the proposed ‘funding for lending’ scheme or even FX interventions”.
“Persistent SEK strength or sharp moves in the currency will likely be met with verbal intervention, and the Riksbank have also demonstrated their willingness to deliver inter-meeting decisions if needed”.
“The path of SEK will likely stay a tug of war between positive developments in the Swedish economy and Riksbank and ECB policy”.
“The Swedish economy continues to perform well, and should be boosted by a pick-up in the Euro area. However the expanded QE program should maintain pressure on SEK, and EUR/SEK may find itself in a range of 9.20 – 9.40 over the shorter term. We maintain our EUR-SEK forecasts, targeting 2Q15 at 9.30, and 9.10 for year-end”.