EUR/SEK Outlook: Slightly weaker, but likely to move sideways as the rate sits below its recent average and near recent lows, lacking a clear driver for movement.
Key drivers:
• Rate gap: The European Central Bank has signaled a cautious monetary policy stance, while the Riksbank has kept its rate stable, which may support the SEK against the EUR.
• Risk/commodities: The recent rise in oil prices, now above average, tends to put pressure on the euro's value by increasing costs in the Eurozone.
• One macro factor: Sweden's economy is projected to grow significantly this year, providing a potential boost for the SEK as domestic demand strengthens.
Range: The EUR/SEK is likely to drift within the current range as it remains stable but limited in upside potential.
What could change it:
• Upside risk: A significant improvement in Eurozone economic indicators could shift the euro's strength.
• Downside risk: Continued weakness in the euro as higher oil prices exacerbate inflation concerns in the Eurozone.
