USD/SEK Outlook:
The USD/SEK is likely to decrease, as it is currently trading near recent lows and below its average over the past three months. A softening of the USD amid a moderate risk appetite further supports this view. ING Bank predicts the USD/SEK could drop below 8.50 this year.
Key drivers:
• Rate gap: The Federal Reserve is expected to maintain a steady approach, while the Riksbank may need to cut rates due to concerns over disinflation.
• Risk/commodities: Recent declines in oil prices have put additional pressure on the USD and supported the SEK, underscoring the impact of commodity trends on currency behavior.
• One macro factor: Sweden’s projected economic growth of 2.6% in 2026 indicates a recovery that may favor the SEK in the medium term.
Range:
The USD/SEK is likely to drift lower, remaining within the previous 3-month range, as bearish factors exert downward pressure.
What could change it:
• Upside risk: A surprise increase in U.S. employment data could elevate the USD.
• Downside risk: Any indication from the Riksbank of aggressive rate cuts could weaken the SEK further.
