USD/SEK Outlook:
Bearish, as the rate is below its recent average and nearing recent lows, reflecting ongoing pressure on the dollar.
Key drivers:
• Rate gap: The Federal Reserve has held interest rates steady, but is facing downward pressure on the USD amid geopolitical uncertainties.
• Risk/commodities: A recent decline in oil prices contributes to softness in the USD, as lower oil prices typically reduce demand for the dollar.
• One macro factor: Sweden’s GDP growth is projected to improve significantly this year, providing support for the SEK against the USD.
Range:
The USD/SEK rate is likely to drift lower within its recent 3-month range, as bearish factors continue to impact the dollar.
What could change it:
• Upside risk: A stronger than expected U.S. jobs report could boost the dollar.
• Downside risk: Escalation of geopolitical tensions may further weaken the dollar.
