Societe Generale: Swedish Krona Looks Undervalued After Recent Declines

The Swedish krona appears undervalued after recent declines, Societe Generale strategist Kit Juckes said. According to Jin10, Juckes said low interest rates have continued to weigh on the currency. He said that, based on the real effective exchange rate, the krona was 6% above its 2023 low, but in real terms it had depreciated 18% over the past 20 years. Data released on Wednesday showed the fixed-rate consumer price index (CPI) in June fell back to 1.3%, which does not support the Riksbank raising interest rates. However, the economic growth rate in May accelerated to 3.9%. Juckes said Sweden’s stronger economic performance relative to the euro area could attract capital inflows and eventually affect inflation.