SEK/EUR Outlook:
Slightly positive, but likely to move sideways, as the rate is above its recent average and lacks a clear driver.
Key drivers:
• Rate gap: The Riksbank's recent interest rate cut suggests a more accommodative approach compared to the stable rate maintained by the European Central Bank.
• Risk/commodities: Oil prices are currently volatile, sitting above their average, which usually supports the SEK due to Sweden's exposure to energy markets.
• One macro factor: Sweden's GDP growth projections for 2026 indicate a recovery in domestic demand, enhancing the SEK's outlook relative to the EUR.
Range:
Expect the SEK/EUR to likely shift within its recent range, showing little directional preference.
What could change it:
• Upside risk: Strong economic data from Sweden could bolster the SEK against the EUR.
• Downside risk: Renewed geopolitical tensions in Europe may negatively impact the euro, leading to increased volatility.
