Swedish growth data came on the soft side this morning. Economists at ING expect the EUR/SEK pair to turn back higher and trade above the 11.10 mark.

Grim data in Sweden

“The second print of fourth-quarter data showed a larger contraction (0.9%) than previously estimated (0.6%). Although this is clearly backward-looking data, the ongoing tightening by the Riksbank, a very fragile housing market and high inflation continue to point to a rather grim economic outlook in Sweden.”

“We see the recent good performance of SEK as unsustainable unless data start pointing at an improvement in the growth outlook. A return to 11.10+ in EUR/SEK (paired with elevated volatility) is a tangible possibility in the coming weeks.”