BUZZ-COMMENT-Outlook for Swedish rates and the crown

Dec 24 (Reuters) - The Riksbank appears to have shifted its focus back to inflation and away from growth concerns, which should offer the crown support in early 2025.

The Dec. 19 central bank policy meeting delivered a 25-basis point rate cut and a more cautious statement of intent for its monetary policy in 2025 - the result being a less convincing case for a January rate cut but the chance of one further policy easing at the May meeting.

Swedish inflation is holding close to the bank's 2.0% target, but a more optimistic outlook for economic growth and fresh fears for the crown suggest the Riksbank will be reluctant to take rates much lower.

Analysts had been looking for two more rates cut in 2025, taking the benchmark rate to 2.0%, but an end to the current easing cycle at 2.25% is now likely.

The SEK has been moving steadily higher versus the euro since early November and, unless there is a major shift in Swedish fundamentals, the downtrend in EUR/SEK should extend through the early part of 2025. Bear targets for the cross include Fibonacci retracement levels taken off the 11.2450-11.7105 September-November rally at 11.4228 and 11.3539. A bearish channel currently provides another downside target at 11.3598 and key trend resistance at 11.5210.

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(Peter Stoneham is a Reuters market analyst. The views expressed are his own)

((peter.stoneham@thomsonreuters.com))