A view on SEK and NOK post-Riksbank – Danske Bank

Senior Analyst at Danske Bank Mikael Milhol gave his assessment on NOK and SEK in the wake of the Riksbank decision on Tuesday.

Key Quotes

“In the Scandies, in many ways the Riksbank (RB) yesterday copied the recent decision on monetary policy by Norges Bank (NB) by removing the cut probability embedded into the rate path while countering the positive currency effect by signalling that no imminent rate hike is in store”.

“For FX markets, however, the big difference between NB and the RB was previous market expectations, as some participants had pencilled in a more hawkish RB rhetoric given the ECB delivering more hawkish comments recently”.

“In that sense, the immediate EUR/SEK price action yesterday has reflected a ‘sell the rumour, buy the fact’ tone. It is notable that EUR/NOK fell yesterday, which we interpret to a large extent as NOK/SEK short covering following the last weeks’ bearish builds”.