The US rate environment may push EUR/SEK into the 11.30 – ING area

Today, markets should see the Riksbank cut rates by 25bps to 3.50%, notes Chris Turner, FX strategist at ING.

The market expects a 50bp rate cut

“The market believes there is a slim chance of a 50bp rate cut. Our team continues to expect the Riksbank to signal at least two further rate cuts later this year, given that the economy has been hit hard by higher rates and now that inflation expectations have fallen back below 2%.

“We don’t think EUR/SEK needs to rise too much on the rate cut. And unless the Riksbank surprises with a 50bp rate cut today, our trend is that the softer US rate environment may take EUR/SEK to the 11.30 area.”