Senior Analyst at Danske Bank Jens Pedersen expects the Riksbank to lower its benchmark rate by 10 bps at its meeting tomorrow. Key Quotes “In respect of EUR/SEK, positioning ahead of the Riksbank meeting tomorrow has weighed on the SEK”. “We expect the Riksbank to cut interest rates by 10bp and to signal a very dovish stance”. “The market is pricing 8bp for tomorrow suggesting that EUR/SEK could move a little bit higher on the decision. However, we still believe that upside is limited and rallies should be short-lived”. “Yesterday’s strong decline to 9.47 after the temporary break above 9.52 in our view supports this call”. “Indeed, a further sell-off in equity markets could potentially trigger some SEK selling due to rebalancing needs supporting further upside in the cross and although cautiousness is warranted given the global market turmoil we prefer to sell rallies”. “We continue to target EUR/SEK at 9.30 in 1-3M but we stay on the sideline in EUR/SEK awaiting the Riksbank tomorrow”. For more information, read our latest forex news.