FX Convictions – EUR/SEK short closed

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: A dovish Riksbank and weaker economic data resulted in our stop loss being hit

171116-Short-EURSEK-closed.pdf (210 KB)
Download

Stop loss hit

De Swedish krona has continued to defy our expectations. Not only has the Swedish central bank been more dovish than expected, inflation numbers have surprised on the downside as well. As a result, financial markets have scaled down their expectations about less accommodative monetary policy.

More recently, Swedish housing market data have been weaker than expected, fueling fears of a serious housing market correction to come. A housing market correction will not only make an exit from loose monetary policy less likely, it will also have a negative effect on the Swedish economy as a whole. As a result of these developments, the Swedish krona has declined considerably and the stop loss on our short EUR/SEK at 9.85 was hit on 14 November 2017. The total return on this position was -3.5%

At the moment we have open FX convictions on our list.