USD/SEK Outlook:
The USD/SEK rate is currently below its recent average and likely to move sideways. This aligns with ING Bank's view that USD/SEK should continue to face downside potential in line with a bearish USD perspective.
Key drivers:
• Rate gap: The Federal Reserve's recent rate hikes have strengthened the USD compared to the Riksbank's more accommodative stance on interest rates.
• Risk/commodities: Oil prices have struggled to maintain gains, which is affecting the Swedish economy due to its reliance on export markets.
• One macro factor: Concerns over disinflation in Sweden are influencing the SEK, as the Riksbank may consider further rate cuts if inflation continues to fall.
Range:
The USD/SEK rate is expected to drift within its recent range, reflecting mixed signals and potential volatility.
What could change it:
• Upside risk: A more hawkish stance from the Federal Reserve could strengthen the USD against the SEK.
• Downside risk: Increased uncertainty over U.S. tariffs could weigh down the USD, resulting in further declines against the SEK.
