Bias: bearish-to-range-bound, EUR/SEK is below its 90-day average and sits in the lower half of the 3-month range, with limited upside.
Key drivers:
• Rate gap: The ECB keeps policy neutral with rates in a narrow band, while the Riksbank holds at 1.75%, leaving only a slim gap between them and unlikely to widen soon.
• Oil risk: Oil moving to 90-day highs adds euro inflation pressure, which tends to weigh on the euro and can give the krona a modest edge as energy markets influence rate expectations.
• Macro factor: Eurozone inflation is easing toward target, supporting a neutral ECB stance and reducing upside for EUR vs SEK.
Range: Expect EUR/SEK to drift toward the lower end of the recent range as flows align with risk and policy cues.
What could change it:
• Upside risk: A hawkish ECB signal or stronger eurozone data could lift the euro and push EUR/SEK higher.
• Downside risk: A faster rebound in Sweden’s economy or a clearer commitment from the Riksbank to outpace the ECB could push EUR/SEK lower.
