Swedish Interest Rates - Cut 25 bps as expected and SEK strengthens?

This morning at 8:30am GMT or 3:30am EST the Swedish Riksbank announced their interest rate changes.

Out of 24 analysts surveyed by bloomberg, 9 expected the Riksbank to hold steady at 2.00%,
11 expected a 25 basis point (bps) cut to 1.75%, and 2 expected a full 50 bps cut to 1.5%.

Quite similar to the expectations for the NorgeBank last week where only a few expected a
50 bps cut and that is what they did, instead the Riksbank today only cut 25 bps as the
majority of anaylsts expected and was the median & average estimate based on all 24 surveyed.

The EURSEK rallied into the release, indicating Swedish Krona (SEK) weakness, as would be
expected by a lowering of interest rates, but this was basically a buy the rumor sell the news
case for the EURSEK pair (or sell the rumor buy the news for the Swedish Krona as a whole).
As soon as the news was released and it was only a 25 bps as expected the EURSEK turned around
and dropped in SEK strength (it is the 2nd currency of the pair). So the SEK weakness, and
EURSEK rally before the news was on the possibility of a 50 bps cut, which when it did not
materialise promptly unwound.

Here is the chart: