Riksbank is increasingly under pressure not only to raise the key rate in September by 25 bps as signaled in June but to raise the rate path further. After all, the June data were already above its expectations and July shows hardly any easing of price pressure, especially in the core rate.

By the next interest rate meeting on September 21, the Riksbank will also know the August inflation figures, which will be published on September 14. But already by then, I think the Riksbank's Executive Council members should be verbally hinting that they will probably have to ‘do more’ to prevent further SEK weakness.

If, in September, the new inflation figures again show little tendency toward easing price pressures, it will become all the more urgent for the Riksbank to make another significant move. Otherwise, things look bleak for the SEK.