Bias: Bearish-to-range-bound, as USD is currently below the 90-day average and in the lower half of the 3-month range.
Key drivers:
• Rate gap: The Federal Reserve is expected to cut rates, while the Riksbank plans to keep its rate steady, potentially widening the interest rate differential and affecting USD demand.
• Risk/commodities: With oil prices facing fluctuations, a decline might negatively impact the Swedish economy and consequently the SEK if the current market volatility continues.
• One macro factor: SEB reports indicate that Sweden’s economy is expected to grow steadily, enhancing the SEK’s attractiveness against the USD.
Range: The USD/SEK rate is likely to hold steady as it navigates the lower part of its recent range.
What could change it:
• Upside risk: A more aggressive tone from the Federal Reserve could strengthen the USD and lift its value against the SEK.
• Downside risk: Continued geopolitical tensions or negative labor market data in the U.S. might deepen the USD's decline against the SEK.
