Following a move higher in EUR/SEK at the very start of this year, the Swedish Krona has re-embarked on its improving trend in recent weeks. Economists at Rabobank analyze the pair’s outlook.

Rate cuts announced by the Riksbank this year will have some connection to ECB policy moves

The risk of triggering another spate of SEK weakness vs. the EUR suggests that it is likely that any rate cuts announced by the Riksbank this year will have some connection to ECB policy moves. 

The market currently expects a little more easing from the ECB than the Riksbank on a six-month view. This likely reflects the higher profile of the CPI inflation rate in Sweden. Assuming no change in this assessment, there is likely scope for EUR/SEK to continue edging lower.