July core CPIF excluding energy rose to 0.6%, supporting SEK despite Riksbank’s no-hike stance and EUR/SEK target of 10.80.
Sweden’s core CPIF inflation, excluding energy, accelerated to 0.6% in July from 0.4% in June, exceeding expectations and providing modest support to the Swedish Krona. Headline inflation slowed to 0.7% from 1.3%, aligning with forecasts.
Markets had already priced in a Riksbank rate hike by year-end, limiting further upside for SEK. Even after adjusting for temporary tax effects, inflation remains insufficient to justify aggressive tightening, according to analysts.
The Riksbank is expected to hold rates steady through year-end, with EUR/SEK projected to settle at 10.80. Hawkish risks have increased slightly, but the baseline outlook remains unchanged.