SEK weakness unjustified – Danske Bank

Christin Tuxen, chief analyst at Danske Bank, points out that after a brief visit above 10.60, EUR/SEK turned lower on comments by Riksbank vice governor Cecilia Skingsley.

Key Quotes

“She said SEK weakness was unjustified based on macro, that she is comfortable with the bank’s repo rate path and stressed that it has become more forward-looking and thus less inclined to respond to spot inflation. The latter can be seen as a response to the substantial January inflation miss.”

“We think the Riksbank’s tolerance to such misses will be tested again next week when the February numbers are due out.”