EURSEK Analysis and Talking Points
- Riksbank Provides Dovish Message
- EURSEK On Course for Largest Daily Gain in Over 2 Years
DailyFX Q2 2019 FX Trading Forecasts
BOTTOM LINE: No Inflation, No Rate Hike
The Riksbank provided a much more dovish message than the markets had expected, which in turn saw EURSEK catapult higher and is track for its biggest intra-day gains since October 2016. The central bank had lowered its repo-rate path, having noted that the rate will remain at current levels for a longer period of time than assumed in February.
The main focal point behind the decision had been due to the soft inflation prospects with the Riksbank highlighting that inflationary pressures have been weaker than expected and is now seen to be lower over the next few years. As such, the Riksbank’s view that the repo rate is expected to be raised again towards the year-end or beginning of next year looks to be somewhat hopeful.
Riksbank Forecasts
| 2019 | 2020 | 2021 | |
|---|---|---|---|
| CPI | 2.0 (Prev. 2.2) | 2.3 (Prev. 2.6) | 2.6 (Prev. 3.0) |
| CPIF | 1.8 (Prev. 2.0) | 1.8 (Prev. 1.8) | 1.9 (Prev. 2.0) |
| GDP | 1.7 (Prev. 1.3) | 1.9 (Prev. 1.9) | 1.8 (Prev. 1.8) |
| Unemployment | 6.4 (Prev. 6.3) | 6.5 (Prev. 6.5) | 6.6 (Prev. 6.6) |
| Repo Rate | -0.2 (Prev. -0.2) | 0.1 (Prev. 0.3) | 0.5 (Prev. 0.8) |
EURSEK Price Chart: 1-Minute Timeframe (Intra-day)
Weekly Technical Analysis on SEK and NOK – Follow Currency Analyst Dimitri Zabelin
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--- Written by Justin McQueen, Market Analyst
To contact Justin, email him at Justin.mcqueen@ig.com
Follow Justin on Twitter @JMcQueenFX
