Summer and the SEK – EURSEK undervalued
The krona is very strong - EUR/SEK is trading at the lowest levels seen since the autumn of 2000.
A strong krona is supported by large interest rate differentials between Sweden and the Euro zone and a pretty decent trend on the stock exchange. From a fair value perspective, the krona is overvalued, however.
Even though we expect the krona to weaken in future, our EUR/SEK forecast increasingly appears not to hold water and we revised downwards our target rates for the entire forecast horizon on Monday 9 July.