Bias: Bearish-to-range-bound, as the EUR is currently below the 90-day average and in the lower half of the 3-month range.
Key drivers:
- Rate gap: The European Central Bank (ECB) is adopting a neutral stance, while the Riksbank maintains a rate of 1.75%, leaning towards stability, which supports the SEK.
- Risk/commodities: Recent oil prices are higher, potentially strengthening the SEK, as a stable oil market can underpin the Swedish economy.
- One macro factor: Sweden's economic outlook shows expected growth and declining unemployment, while the Eurozone faces sluggish economic performance due to poor trade figures.
Range: Movement in the EUR/SEK is likely to remain within its recent stable range, with lows around 10.70 limiting downward pressure.
What could change it:
- Upside risk: A stronger-than-expected recovery in Eurozone economic data could boost the EUR.
- Downside risk: Continued geopolitical tensions or further weak economic indicators from the Eurozone could further depress the EUR.