EUR/SEK seen moving back to 10.80 on a 12-month view – Rabobank

The Swedish Krona (SEK) has given back some of the ground it won vs. the Euro (EUR) in the final two months of last year. Economists at Rabobank analyze EUR/SEK outlook.

EUR/SEK to trend lower towards 11.00 on a 3-to-6-month view

A cautious outlook on rates from the Riksbank combined with a dash of optimism that the domestic economic outlook should improve later this year suggests scope for the SEK to regain its footing and for EUR/SEK to trend lower towards 11.00 on a 3-to-6-month view.

Despite the SEK’s improved tone late last year, EUR/SEK remains well above its 5-year average. A weak currency will add to inflation risks. However, it can also generate growth through the export channel; signs of this may now be emerging. We would expect EUR/SEK to continue its normalisation this year and move back to 10.80 on a 12-month view.