EUR/SEK: Krona to remain under pressure for the time being – Commerzbank

Since the beginning of May, the SEK has depreciated significantly again. The weakness of the Krona may become too much for the Riksbank and may act, economists at Commerzbank report.

Rate hikes should be the Riksbank's first choice against currency weakness

“Rate hikes should be the Riksbank's first choice against currency weakness, as intervening in the currency market (in this case in favor of its own currency) would be a ‘leaning against the wind’ strategy with questionable chances of success. Therefore, it will be particularly interesting to see whether the Riksbank's last rate hike really comes at the end of June or not.”

“As long as the US debt crisis continues to unsettle the markets, even strong words from the Riksbank will have little effect and the SEK will remain under pressure for the time being.”

See – EUR/SEK: Krona’s near-term outlook remains grim – ING