- EUR/SEK recovers some lost ground around 11.82, up 0.03% on the day.
- The German Gfk Consumer Confidence Survey came in at -25.5 versus -24.6 prior.
- The less hawkish stance of the Riksbank compared to the ECB might limit the upside of the Swedish Krona.
- Investors will monitor the German CPI, Eurozone Retail Sales, ECB Meeting Minutes due later this week.
Following a Wednesday morning rebound from the weekly low of 11.79, the EUR/SEK cross registers a slight gain at 11.82. For new energy, market investors are anticipating the preliminary German Consumer Price Index for August. The predicted yearly and monthly CPI increases are 6% and 0.3%, respectively.
— FXStreet News (@FXStreetNews) August 30, 2023
The German Gfk Consumer Confidence Survey for September reported on Tuesday came in at -25.5 versus -24.6 prior and worse than the expectation of -24.3. Earlier, the Eurozone money supply fell for the first time since 2010 as private sector lending slowed and deposits fell. The softer economic data might convince the European Central Bank (ECB) to pause interest rates at its next meeting on September 14.
Nevertheless, policymakers were divided between a pause and additional tightening. The release of Eurozone inflation data and the ECB’s new economic projections this week could offer hints about future monetary policy.
Holzmann (ECB): "New rate hikes if there are no surprises"
🇦🇹Governor of the Austrian Central Bank, Robert Holzmann, foresees new interest rate hikes as the European Central Bank has not tamed inflation.
⚡"We don't have a clear picture of inflation yet. If there are no major… pic.twitter.com/xim3rJS7Ph
— Dēmiurgòs (@DemiurgosCaen) August 29, 2023
On the other hand, the policymakers at the Riksbank unanimously decided to raise the policy rate on June 29 by 25 basis points (bps), to 3.75%. The Swedish central bank predicted that interest rates would likely increase at least once more in 2018. In contrast to the ECB, the Riksbank is not fighting inflation with enough vigor. This could consequently restrict the Swedish Krona’s upward potential and boost the EUR/SEK exchange rate.
European Central Bank Pressures Lenders to Address Exposure to Real Estate Tycoon Rene Benko's Businesses#ECBWarning #RealEstateExposure #FinancialRisk #BankingSector #BusinessExposure https://t.co/Ya6DMQyYjH
— Emmanuel Abara Benson (@Mr_Abara) August 29, 2023
Market players will keep an eye on the preliminary German and Eurozone Consumer Price Index (CPI) for August, Eurozone Retail Sales, and the ECB Meeting Minutes. Traders will take cues and find trading opportunities around the EUR/SEK cross.