FX Convictions – Stop loss hit in EUR/SEK

by: Georgette Boele

DISCLAIMER: This report has not been prepared in accordance with the legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead. This report is marketing communication and not investment research and is intended for professional and eligible clients only.

In this publication: We close our SEK long versus EUR with a total loss of 2%. The euro has been more resilient and Swedish CPI lower than expected. So we wait and see for now

161011-stop-loss-eursek.pdf (150 KB)
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Stop loss hit EUR/SEK

On 16 September 2016 we opened a SEK long versus EUR at 9.56. Unfortunately our stop loss at 9.75 was hit today. The total loss was 2%. Firstly, the euro has been more resilient because of talk of a possible ECB taper. We think expectations for an ECB taper are overdone and continue to expect an extension. In addition, Swedish CPI for September came in far below expectations. This has dampened our expectations that the Riksbank may adjust its forward guidance this year to signal an earlier rate hike in 2017. We stay on the sidelines for now to see the further developments.