SEK reaction to Riksbank, thoughts on $USDSEK positioning
Noticed the Riksbank's slightly more hawkish tone yesterday, hinting at a potential earlier rate hike than previously priced in by some. We've seen a bit of a bounce in SEK, with $USDSEK now trading around 9.74634 after flirting with higher levels earlier in the week. The daily range today has been pretty contained between 9.7392 and 9.7598.
While it’s not a full pivot, it does introduce a new dynamic for those of us watching Scandi pairs. I'm thinking if they follow through with that hawkish rhetoric, we could see some further unwinding of the recent USD strength against SEK. It's got me reviewing my short USD positions and wondering if there's more legs to this shift. Curious to hear how others are thinking about this setup.