Sweden's Riksbank Raises Interest Rates: EUR/SEK Downtrend Remains Intact
EUR/SEK Price Forecast, Analysis and Chart:
- Riksbank raises the repo rate from -0.25% to 0.00%.
- EUR/SEK dominant downtrend remains for now.
The Swedish central bank – Riksbank – has raised its repo rate to 0.00% from -0.25%, citing concerns over household indebtedness and rising house prices. The Riksbank said that inflation is expected to remain close to target (2%) going forward and that while the economy has entered a phase of lower growth,
‘the slowdown is occurring after several years of high growth and strong developments on the labour market, and overall it means that the Swedish economy is going from a stronger-than-normal cycle to a more normal situation’.
The decision to lift the repo rate out of negative territory was expected by the market, after the central bank gave a strong indication in October. The decision was not without its detractors with Deputy governors Anna Breman and Per Jansson both highlighting their reservations about the move to raise rates. The central continues to buy government bonds for a total nominal amount of SEK 45 billion all the way through to December 2020.
For a full run down of all economic release, see the DailyFX Economic Calendar.
EUR/SEK continues to drift lower from its decade high print of 10.9349 made on October 10, the same time as the central bank indicated that it would likely shift monetary policy. The daily chart remains negative with the spot price under all three moving averages and nearing its lowest level since mid-April.
EUR/SEK Daily Price Chart (March – December 19, 2019)
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