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Another hike remains an important step toward SEK strengthening – ING

November 14, 2023| Forex Market


Swedish core inflation slowed more than forecast in October. SEK seems limited after the release. Economists at ING analyze Krona’s outlook.

Faster inflation decline raises doubts about hike

While CPIF inflation accelerated – once again, less than expected – from 4.0% to 4.2%, the preferred core inflation measure by the Riksbank (CPIF excluding energy) slowed sharply from 6.9% to 6.1%.

Our stance on SEK is clear. FX hedging operations are offering an edge to the Krona over other pro-cyclicals in the short term and in an improving risk environment, but those operations should end by February anyway – meaning this is not a sustainable driver of currency appreciation. In other words, another hike remains an important step toward SEK strengthening.

We are still inclined to think the Riksbank will hike next week, although we admit this is closer to a 50/50 call at this stage. Wednesday’s Prospera inflation expectations survey results will help us make a final call. 

For now, SEK weakness seems limited after the inflation release, probably given expectations of Riksbank FX selling later today.


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