Bias: The SEK/USD is bullish-to-range-bound, sitting above the 90-day average and within the upper half of the 3-month range.
Key drivers:
- Rate gap: The Riksbank's decision to maintain a policy rate at 1.75% contrasts with expectations of upcoming rate cuts by the Federal Reserve, bolstering the SEK against the USD.
- Risk/commodities: Recent trends in oil prices are volatile, impacting global risk appetite, which can influence both currencies depending on how investors react.
- One macro factor: Sweden’s fiscal stimulus measures are expected to boost economic growth and household income, offering support to the SEK.
Range: The SEK/USD is likely to drift within its recent range, showing stability while facing potential challenges from external factors.
What could change it:
- Upside risk: Stronger-than-expected Swedish economic indicators could lead to more SEK appreciation.
- Downside risk: Dovish comments from Federal Reserve officials might weaken the USD, affecting the SEK/USD rate.