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19 May 2014
EUR/SEK: Another floor for Europe? - HSBC
FXStreet (Córdoba) - The HSBC analyst team thinks Sweden may wish to adopt a CHF-style floor and in the EUR/SEK to prevent outright deflation.
Key Quotes
"Any future QE by the ECB is likely to see the EUR weaken substantially. This will have knock-on effects for other currencies, but the impact may be felt most acutely in Sweden".
"This small open economy with strong trade links with the Eurozone could see its already low inflation flirt with outright deflation as EUR/SEK slid lower".
"With little room for manoeuvre on interest rates, the best way to insulate the Swedish economy from the damage of a weaker EUR would be to install a floor on EUR/SEK".
"Switzerland provides the template, and Sweden would be well advised to follow suit".
Key Quotes
"Any future QE by the ECB is likely to see the EUR weaken substantially. This will have knock-on effects for other currencies, but the impact may be felt most acutely in Sweden".
"This small open economy with strong trade links with the Eurozone could see its already low inflation flirt with outright deflation as EUR/SEK slid lower".
"With little room for manoeuvre on interest rates, the best way to insulate the Swedish economy from the damage of a weaker EUR would be to install a floor on EUR/SEK".
"Switzerland provides the template, and Sweden would be well advised to follow suit".