GBP/SEK Outlook: Slightly weaker, but likely to move sideways due to the rate being below its recent average and near recent lows.
Key drivers:
• Rate gap: The Bank of England's cautious approach to rate cuts contrasts with the Riksbank's steady policy, limiting GBP's potential against the SEK.
• Risk/commodities: Oil prices have remained steady, which generally supports the SEK as Sweden is closely tied to energy markets.
• One macro factor: Sweden’s stable economic outlook is bolstered by government fiscal measures and decreasing unemployment, suggesting potential support for the SEK.
Range: The GBP/SEK is likely to drift within its recent trading band, not testing extremes as both currencies show limited volatility.
What could change it:
• Upside risk: A sudden rise in UK inflation or growth unexpectedly stronger than projected could lift GBP against SEK.
• Downside risk: Continued weakening of the UK economy or external geopolitical risks could further pressure GBP.
