Sweden Seen Closer to Krona Intervention to Tame Exchange Rate
- Nordea, SEB see 9.00 per euro as likely intervention trigger
- Citigroup recommends short-term investors pare krona bets
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Some of Scandinavia’s biggest banks are warning investors not to underestimate the risk that the central bank is preparing to intervene in the currency market.
Nordea and SEB both say the Riksbank won’t allow the krona to strengthen beyond 9 against the euro. It traded at 9.18 as of 4:06 p.m. in Stockholm. The prediction follows a Dec. 30 warning from the central bank that it’s ready to act if persistent krona strength gets in the way of its 2 percent inflation target. The bank said on Monday it had now put in place the framework allowing it to “instantly intervene on the foreign exchange market if necessary.”