Riksbank may have to take further measures to achieve a smooth and gradual strengthening of the SEK

Data showed that Sweden's inflation for January came in better than expected, somewhat higher than the Riksbank's view. CPI m/m came in at -0.34% (Nordea -0.58; consensus -0.6; prior 0.1), while CPIF inflation, with or without energy, stood at 1.6% y/y, 0.1% point above forecasts.

With ECB likely to deliver aggressive policy easing in March there are renewed prospects for EUR/SEK downside. Much depends on how far the ECB will go. The Riksbank may have to take further measures to achieve a smooth and gradual strengthening of the SEK.

"Inflation for January came out somewhat higher than the Riksbank's view. This is of some relief for the Riksbank. However, there is still a risk that the bank will take more action going forward." said Nordea Bank in a research note.