EUR/SEK continues to move higher. It is hard to put a limit to the rally in EUR/SEK at this stage, in the view of economists at ING.

Hard to halt the freefall

“The risk-off wave coming from China puts European currencies in a vulnerable position and SEK remains the favourite short in the region given the Riksbank's unsupportive narrative and other domestic issues.”

“It's hard to put a limit to the rally in EUR/SEK at this stage. Another acceleration in the unsupportive environment for high-beta currencies could easily see the pair trade around 11.70-11.85 before the end of the week.”

“We’ll need to see whether the Riksbank will step in with some threats of FX intervention at one point, although the latest comments did not point in that direction.”