SEK/USD Outlook:
The SEK/USD rate is slightly positive and likely to move sideways as it currently trades above its 90-day average. However, there is no strong driver pushing it significantly in either direction.
Key drivers:
- Rate gap: The Riksbank has indicated potential rate cuts if inflation decreases, while the U.S. Federal Reserve is continuing its path of rate cuts, creating an advantageous gap for the SEK.
- Risk/commodities: Recent geopolitical tensions, which have boosted demand for safe-haven assets like the USD, may add pressure on the SEK.
- One macro factor: Sweden's economy is projected to grow, aided by fiscal stimulus, although the Riksbank's concerns over disinflation could impact monetary policy decisions.
Range:
Expect the SEK/USD to drift within its recent range without testing extremes, as both currencies have stabilizing influences at play.
What could change it:
- Upside risk: A stronger-than-expected U.S. GDP report could reverse recent dollar strengths.
- Downside risk: If disinflation fears prompt a more aggressive response from the Riksbank, this could weaken the SEK.
