USD/SEK Outlook: Slightly weaker, but likely to move sideways, as the rate is below its recent average and shows limited drivers for change.
Key drivers:
• The Federal Reserve has halted rate cuts, maintaining higher interest rates compared to the Riksbank's stable policy, which keeps the USD under pressure.
• Despite geopolitical tensions affecting investor confidence in U.S. assets, Sweden's economy is projected to grow, providing some strength to the SEK.
• Markets are optimistic about the SEK's performance, with some forecasts suggesting it may outperform the USD in early 2026 based on favorable global risk factors.
Range: The USD/SEK rate is likely to drift within its recent range, moving sideways without testing extremes.
What could change it:
• An unexpected uptick in U.S. economic data could boost USD confidence and lead to an increase.
• Continued geopolitical tensions or a clearer trend towards global de-dollarization could further weaken the USD.
