SEK: Spectre of US protectionism warrants a near-term bearish outlook - ING

Viraj Patel, Research Analyst at ING, suggests that they have been somewhat prompted to turn bearish on SEK – with the spectre of US protectionism and a ‘trade war risk premium’ weighing on the FX of small-open economies like Sweden.

Key Quotes

“In addition, SEK has all but lost its relative current account surplus advantage versus the EUR – making the currency increasingly vulnerable to global risk factors. Finally, recent SEK weakness is unlikely to see a significant inflation overshoot, thus will unlikely warrant any Riksbank response. These factors mean we now expect EUR/SEK to hit 10.30 in the coming months.”