UBS expressed a positive view on the currency pair, indicating potential upside.
The company noted that both the Norwegian krone (NOK) and the Swedish krone (SEK) are outperforming their targets for the end of the second quarter, which are set at 11.70 for the euro against the Norwegian krone () and 11.80 for the euro against the Norwegian krone. Swedish crown (). Despite this, UBS maintains higher confidence in the SEK achieving its target compared to the NOK.
The bank’s increased confidence in the SEK is due to the fact that the consumer price index (CPI) in Sweden is below the forecasts of the Riksbank, the Swedish central bank. This development suggests that there could be an increased possibility that the market is pricing in further monetary easing ahead of the Riksbank’s upcoming meeting, scheduled for June 27.
The performance of the NOK and the SEK against the euro is an important indicator of their relative strength. With currencies beating UBS expectations earlier than expected, this reflects a dynamic currency market. The NOKSEK pair in particular is closely watched as it represents the exchange rate between the two Scandinavian currencies.
UBS’s outlook is important because it provides insight into expected currency movements and potential central bank actions. Investors and traders often look to such analyzes to inform their decisions in the currency markets.
Anticipating the Riksbank’s reaction to the lower-than-expected CPI figures adds an element of uncertainty to the market, which could impact trading strategies in the weeks leading up to the June 27 meeting. The bank’s decision whether or not to adjust its monetary policy could affect the SEK’s performance against both the NOK and the euro.
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