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The Swedish Krona is still undervalued.
In our view, SEK remains significantly undervalued relative to the EUR on a PPI basis.
If global monetary tightening appears to be largely over, the currency’s high beta would point to further gains for the SEK.
If the Riksbank’s tightening cycle draws to a close, this should help cushion the current real estate headwinds. Anecdotal evidence from the housing market suggests that negativity is dissipating.
EUR/SEK Outlook – Q3 2023: 11.45; Q4 2023: 11.04.
