We want to stress this was a missed chance for the Riksbank to materially lift SEK. The new rate forecasts suggest another hike is not particularly likely, but markets still see good chances of that being delivered. Once again, EUR/SEK is left to be driven by external factors, at least until key Swedish data are released. This isn’t great news for SEK in the near term. 

Another jump to 12.00 is absolutely possible, and breaking above that level is also a very tangible risk given global risk instability and Swedish data volatility. 

We agree with the Riksbank that the shockingly undervalued Krona will ultimately appreciate and that hedging FX reserves is a good idea. We still think that our 11.00 EUR/SEK target for the second half of next year can be reached. However, the Riksbank missed another opportunity to insulate SEK from more short-term pain.