NOK and SEK look to rate decisions – Danske Bank

Analyst at Danske bank Mathias Mogensen noted the prospects for NOK and SEK in light of this week’s Norges Bank and Riksbank meetings.

Key Quotes

“FX markets are eyeing central bank decisions in Sweden and Norway on Thursday”.

“The weakening of the SEK has given the Riksbank a bit of room to manoeuvre in the short term. We expect EUR/SEK to remain within the 9.68-9.72 boundaries near-term but to break from this range on the Riksbank announcement on Thursday. Risks are in our view asymmetrically skewed to the upside on the announcement in the sense that a QE extension would drive a larger reaction than if the Riksbank were to stay put”.

“If we are right in our call on Norges Bank, EUR/NOK is unlikely to move much on Thursday’s announcement. As a result, we think the EUR/NOK price action is likely to be that of an initial dip following the announcement followed by a rebound to unchanged levels. While downside momentum has been strong over the last month, we still expect EUR/NOK to correct higher before year-end”.