Sweden's crown hit its strongest level against the euro in around four months on Thursday boosted by inflation data, but further gains will be limited by the central bank's worries that a stronger currency will push down prices.
With tepid price pressure globally, a weaker currency has been the main focus of the central bank over the last couple of years as it aims to drive up inflation after years of undershooting its 2 percent target.
Inflation is now on a firmer footing, the economy is expanding robustly and the Riksbank - which has said the crown is undervalued - may be prepared to see the currency move closer to what many analysts estimate is fair value at around 9.00 to the euro.
But the central bank's patience will be limited.
"I think the crown will strengthen to 9.40 against the euro within a month," Richard Falkenhall, a foreign exchange analyst at SEB, said.
"But, if we see a fast strengthening of the crown, to around 9.30 against the euro within a few weeks, then I think the Riksbank will go out and intervene verbally."
After losing around 10 percent of its value against the euro through November last year on the back of negative rates and a 245 billion Swedish crown ($27.40 billion) bond purchase programme, the Swedish currency has staged something of a revival in recent months.
It has gained around 2 percent on a trade-weighted basis
since the December rate decision was published, putting it at a level the central bank forecast it would not reach until the third quarter this year.
On Thursday, it hit its highest level against the euro since September after figures showed underlying inflation hitting 1.9 percent in December, just below the Riksbank's 2 percent target.
The crown was trading at around 9.50 to the euro at 0953 GMT, partly boosted by minutes of the central bank's most recent meeting which strengthened views that the easing cycle is over.
The Riksbank has warned it will not let the crown strengthen too far, too fast as that could put the brakes on the upturn in prices.
"They have more tolerance, but they have not taken their eyes off the crown," Stefan Mellin, analyst at Danske Bank said.