USD/SEK Outlook:
Slightly weaker, but likely to move sideways as the rate is below its recent average and trading near recent lows.
Key drivers:
• Rate gap: The Federal Reserve's decision to pause interest rate cuts contrasts with the Riksbank's accommodative policy, impacting their respective currencies.
• Risk/commodities: Recent fluctuations in oil prices could indirectly affect USD, as higher oil prices typically strengthen SEK given Sweden's economic ties to commodity markets.
• One macro factor: Sweden's GDP growth is set to accelerate, driven by fiscal stimulus and increased domestic demand, enhancing the SEK outlook.
Range:
Expected movement within the recent range will likely drift as it adjusts to current pressures.
What could change it:
• Upside risk: A surprise uptick in U.S. economic data could boost USD strength.
• Downside risk: Increased geopolitical tensions surrounding U.S. trade policy could further weaken USD.
