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Limited upside for SEK – Nomura

FXStreet (Barcelona) - Research Analysts at Nomura see inflation surprises limiting upside room for the SEK.

Key Quotes

“We expect the Riksbank to continue using its repo rate path to influence market sentiment and to continue to suggest a stronger linkage between the decision/path of the repo rate and inflation. The sensitivity of SEK to inflation surprises is expected to remain high, limiting upside room for SEK.”

“We have been trading SEK from the short side throughout this year, and currently recommend being short SEK in our GBP long basket. We still see limited upside room for SEK against other European G10 FX. USD/SEK is also expected to perform well into 2015."

"The Riksbank is not likely to employ unconventional policy tools anytime soon and SEK is the weakest G10 currency so far this year, but we recommend keeping a short bias for SEK.”

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