EUR/SEK broke the 2022 highs yesterday. The next key resistance is found in the 2020 covid crash peaks (all above 11.00). However, economists at ING do not expect the pair to surpass the 11 level.

A return below 10.50 in early 2023 is still possible

“We do admit that SEK has quite a lot of negatives in the price at the moment, and a move above 11.00 in EUR/SEK is still not our base case at this stage, but we acknowledge downside risks have mounted for the krona due to the challenging economic and market conditions, and there is not much the Riksbank’s monetary policy can do to help in the near term.” 

“If anything, a U-turn (which was however ruled out by Governor Stefan Ingves yesterday) on FX purchases would likely ease some pressure on SEK.”

“A return below 10.50 in EUR/SEK in early 2023 is still possible, as the krona should be at the forefront of any recovery in global and European risk sentiment. But the timing and likelihood of such a scenario are surely uncertain for the time being.”