Talking Points:
- Riksbank cut the Repo Rate to -0.25% in conjunction with a SEK 30 billion QE Program
- EUR/SEK pair initially appreciated 2.2%, before finding resistance
- Directional movements will next be guided by the Economic Tendency Survey and PPI
On Wednesday March 18th, the Riksbank further deepened the Repo Rate, lowering it by 15 basis points to -0.25%. Taking effect on March 25th, the overnight rate is said to be accompanied by a bond purchase program in the amount of SEK 30 billion. The decision was designed to encourage an upward movement in inflation and was motivated by fluctuations in the FX market; particularly, with regard to the recent appreciation of the Krona.
In response to the decision, the Euro immediately appreciated against the Krona with the pair advancing by 2.2%. In determining whether the krona’s weakness can be sustained, traders will look to additional data set to be released this week, pertaining to price levels and economic sentiment.
Thus, looking forward at the week ahead, the Krona will likely be affected by the following Events:
| Release Date | Release Time | Event | Date | Reporting Agency |
|---|---|---|---|---|
| March 25th | 08:00 GMT | Economic Tendency Survey | MAR | NIER |
| March 26th | 08:30 GMT | PPI (YoY) | FEB | Statistics Sweden |
| March 27th | 08:30 GMT | Retail Sales (MoM) | FEB | Statistics Sweden |
