![\"printprofile\"](\"http:\/\/www.forexyard.com\/blog\/en\/wp-content\/uploads\/profile-pics\/9.jpg\")
<\/p>\n<\/p>\n
The Risksbank increased the repo rate by 25 bps earlier today while raising both its growth and inflation forecasts. Immediately following the announcement the SEK surged versus the euro to a Fibonacci retracement level. <\/p>\n
<\/span>Citing strong economic growth and increased inflation expectations the Risksbank<\/a> hiked interest rates to 2.0% from 1.75%. In the accompanying rate statement the Swedish central bank said it expects the economy to grow this year by 4.6% in contrast to its previous forecast of 4.4%. Next year the Risksbank forecasts increased growth of 2.3% from 2.2% expected growth. CPI expectations were also increased to 3.2% from 3.1% in 2011 and next year inflationary forces should moderate to 2.8%.<\/p>\n Given the higher expectations for GDP and CPI, the SEK could make further inroads against the euro on expectations of higher Swedish rates. Comparing<\/a> the euro zone\u2019s growth prospects with the background of the peripheral debt crisis and the Swedish krona looks to be much better growth play. <\/p>\n Turning to the charts the EUR\/SEK appears to have made a top in its rebound and the move has retraced to 9.0530, near the 38% Fibonacci level from the March to June move. A close below this level would go a long way to shifting momentum to the downside back in line with the long term trend. The next target would be the 61.8% Fib at 8.9170, followed by the June 1st low at 8.8770. Should the pair bounce higher from its current support the EUR\/SEK would encounter resistance at 9.1250 and the June high at 9.2725.<\/p>\n![\"EURSEK_Daily\"](\"http:\/\/www.forexyard.com\/blog\/en\/wp-content\/uploads\/2011\/07\/EURSEK_Daily.JPG\" "\\"EURSEK_Daily\\"")
<\/p>\n