The Riksbank paused, but inflation and currency-related concerns prompted policymakers to threaten another hike and open the discussion on faster bond sales. However, we don’t forecast any more hikes, given the deteriorating activity outlook. 

We have called for a correction in high-beta currencies after the post-US CPI rally, and we have a modest bullish bias on EUR/SEK into year-end, where we could see a return of levels around 11.60.

Should our baseline scenario of a benign USD decline and generalised support for pro-cyclical currencies materialise next year, then EUR/SEK should be able to hit 11.00 before year-end 2024.

Where November’s Riksbank decision may end up having an impact on the SEK outlook is in the periods of risk-off corrections. The change in stance by the Riksbank makes SEK more vulnerable, especially in the near term, meaning the depreciation path may be bumpier.