USD/SEK Outlook:
The USD/SEK exchange rate is currently below its 90-day average and near recent lows. This positioning suggests a bearish outlook, consistent with the recent prediction from ING Bank that anticipates the rate may drop significantly this year.
Key drivers:
• Rate gap: The Federal Reserve has shifted to a more dovish stance, while the Riksbank remains cautious, potentially favoring the SEK.
• Risk/commodities: The increase in safe-haven demand due to geopolitical tensions, particularly involving Iran, supports the USD, but this climate is volatile.
• Macro factor: Sweden’s economic growth is forecasted to accelerate, which could bolster the SEK against the USD.
Range:
The USD/SEK is likely to drift within its recent range, oscillating between recent lows and mid-range levels.
What could change it:
• Upside risk: Unexpected improvements in U.S. economic data could lead to a stronger USD.
• Downside risk: A continued decline in U.S. inflation could pressure the dollar further.
