Bias: Bearish-to-range-bound, as the EUR/SEK is currently below the 90-day average and in the lower half of its 3-month range.
Key drivers:
• Rate gap: The European Central Bank is maintaining its current neutral monetary policy, while the Riksbank has also kept Sweden's policy rate stable, creating a close rate environment.
• Risk/commodities: Oil prices have been volatile, which tends to influence the Euro negatively amid ongoing geopolitical concerns that affect the Eurozone’s economy.
• Macroeconomic factors: The recent disappointing trade and retail sales data from Germany points to a potential slowdown in the Eurozone economy, which could exert further pressure on the euro.
Range: EUR/SEK is expected to hold within the recent range, with limited upward momentum due to current economic indicators.
What could change it:
• Upside risk: A strong rebound in Eurozone economic data, particularly from Germany, could support euro gains.
• Downside risk: Escalation in geopolitical tensions affecting energy prices could further weaken the euro.
