Ing’s FX analyst Francesco pesol notes, if the geopolitical risk is priced, Scandinavian currencies should also be successful, and they are better positioned than Norway’s Krone because of opposing exposure to the energy prices of Sweden’s Krona.
Swedish crown of exposure to opposing energy price
“Yesterday, the decline in NOK/SEK can be attributed to this. Sweden also reported an acceleration in July CPIF inflation, but this was widely expected and the nucleus inflation slowed faster than predicted.”
“We still do not predict any extra deduction by Riksbank, but we admit that this is a much closer call after the EU-US Trade Agreement. Anyway, the markets are fully pricing, so we do not worry about our rise in the SEK.”
