SEK appears doubtful near term – Danske Bank

Jens Pedersen, Senior Analyst at Danske Bank, gave his views on the recent price action around the Swedish Krona.

Key Quotes

“Notably, EUR/SEK was bid yesterday despite intensified turmoil in Italy. There is still no evidence that the triple A-marked SEK should benefit from the eurozone crisis as some have suggested, referring to the 2012 experience. We doubt that it will become an SEK-positive driver under the current circumstances”.

“What is perhaps more surprising is that there is no follow-through yet after SNDO’s announcement on Friday to start building a long position in SEK. The direct SNDO flow effect is negligible, and what matters instead is the signalling effect. At the end of the day, however, it is the data that will set the trend”.