USD/SEK Outlook: Slightly weaker, but likely to move sideways as the rate is below its recent average and near recent lows with mixed signals ahead.
Key drivers:
- Rate gap: The US Federal Reserve has paused rate cuts, maintaining a higher interest rate than Sweden's central bank, which keeps the USD more attractive relative to the SEK.
- Risk/commodities: Volatility in commodity and equity markets has driven demand for the safe-haven USD, offering short-term support.
- One macro factor: Economic growth in Sweden is projected at 2.6%, supporting potential SEK strength against the USD.
Range: The USD/SEK is likely to hold within its recent range, drifting sideways due to opposing forces.
What could change it:
- Upside risk: A positive US employment report could bolster the USD further.
- Downside risk: Any negative economic data from the US may accelerate a shift towards the SEK as investors prefer safer assets.
