Swedish Inflation Data Gives SEK Modest Boost Against Euro

Sweden's inflation data for July has been released, showing a rise in core CPIF excluding energy to 0.6% from 0.4% previously.

This modest increase has given the Swedish Krona (SEK) a small boost against the Euro, with markets reacting positively to the hotter core print.

However, despite this slight increase, ING's FX Strategist Francesco Pesole believes that even after adjusting for temporary tax effects, inflation is not strong enough to justify market pricing of Riksbank tightening.

Pesole maintains a no-hike view and predicts a year-end EUR/SEK target of 10.80, citing that markets were already fully pricing in a Riksbank hike by year-end which limited the upside for front-end SEK rates.