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16 Mar 2015
Riksbank does not rule out a rate cut this week – TDS
FXStreet (Edinburgh) - Strategist Jacqui Douglas at TD Securities sees the likeliness of a rate cut by the Riksbank in its next meeting.
Key Quotes
“The inflation data over the last week admittedly was not particularly supportive of our call for an intermeeting rate cut from the Riksbank”.
“However, the strength in the currency may be the tipping factor instead, as even post-CPI one Deputy Governor came out to say that any strong SEK appreciation would be a “big problem,” and that the EURSEK rate would be “very important” in policy talks”.
“So far EURSEK has seen lows of just below 9.06, coming ever closer to the 9.00 mark that many consider to be the breaking point for the Riksbank”.
“So the odds of an intermeeting cut are probably close to 50-50 now, but high enough that we still like taking the punt, especially in the currency where in lieu of a rate cut, an extension of QE or other credit support could possibly be announced”.
Key Quotes
“The inflation data over the last week admittedly was not particularly supportive of our call for an intermeeting rate cut from the Riksbank”.
“However, the strength in the currency may be the tipping factor instead, as even post-CPI one Deputy Governor came out to say that any strong SEK appreciation would be a “big problem,” and that the EURSEK rate would be “very important” in policy talks”.
“So far EURSEK has seen lows of just below 9.06, coming ever closer to the 9.00 mark that many consider to be the breaking point for the Riksbank”.
“So the odds of an intermeeting cut are probably close to 50-50 now, but high enough that we still like taking the punt, especially in the currency where in lieu of a rate cut, an extension of QE or other credit support could possibly be announced”.