USD/SEK Outlook: Bearish, as the rate is significantly below its recent average and near recent lows, influenced by current economic concerns.
Key drivers:
• Rate gap: The Federal Reserve is expected to ease rates in the future, while the Riksbank maintains a stable policy rate, creating a favorable environment for the SEK.
• Risk/commodities: The downward trend of the USD reflects investor unease due to geopolitical tensions and the potential for another government shutdown.
• One macro factor: Morgan Stanley's forecast points to the SEK outperforming the USD in early 2026, supported by positive economic conditions in Sweden.
Range: The USD/SEK is likely to drift lower within its recent range, given its current position and mixed signals ahead of upcoming economic announcements.
What could change it:
• Upside risk: A surprising strength in upcoming US labor market data could boost the USD.
• Downside risk: Increased geopolitical tensions could further weaken the USD.