EUR/SEK: North of 11.00 amid market stress – Danske Bank

The base case for the EUR/SEK pair is trading north of 11.00, in the opinion of analysts at Danske Bank.

Key quotes

“The combination of relatively poor liquidity and a massive sell-off in equities alongside ‘must do’ flows has been toxic for the SEK and the main reason why the cross surged well above 11.00. Conversely, the recent risk-on pulled the cross lower again.”

“If the fragile optimism prevails, then EUR/SEK could find a temporary equilibrium below 11.00.” 

“If general market stress returns, then it is north of 11.00 where EUR/SEK should trade. North of 11.00 is our base case.”