50/50 probability of Riksbank cutting interest rates

Scandi currencies rallied on Wednesday heading into the Riksbank meeting today. Risks to EUR/SEK are skewed slightly to the upside ahead of the monetary policy decisions in Sweden and the euro zone. There is a 50/50 probability of the Riksbank cutting interest rates today. 

At the least, the Riksbank will be very dovish and lower its inflation forecasts. The market is currently pricing in around 4bp of cut for today's Riksbank announcement. 

"If the Riksbank cuts interest rates, EUR/SEK would be expected to rally towards 9.55-9.60, which would be a good opportunity to go short EUR/SEK again, as there is long-term value in the SEK. If the Riksbank does not cut but is dovish, EUR/SEK is expected to fall to around 9.40", says Danske Bank.