The SEK to EUR exchange rate is currently bullish, trading near 90-day highs. Key drivers include the interest rate differential, with the Riksbank holding its policy rate at 2.25%, while the European Central Bank (ECB) maintains a flexible approach to interest rates. Additionally, Sweden's GDP is projected to grow, enhancing economic prospects for the SEK.
The near-term trading range is expected to remain stable, with fluctuations around the current price as conditions normalize.
Upside risk could arise from improved global risk sentiment and solid economic data supporting SEK growth, while a downside risk stems from unstable geopolitical conditions affecting the euro, given its sensitivity to political events and economic challenges in the Eurozone.
Recent oil trends show a slight increase in oil prices, which may impact the euro indirectly, adding another layer to potential exchange rate shifts. However, the overall sentiment for the SEK looks cautiously optimistic.