USD/SEK Outlook:
Bearish, as the rate is below its recent average and near recent lows, while under pressure from weak US economic data.
Key drivers:
• Rate gap: The Federal Reserve's decision to hold interest rates steady while showing signs of economic weakness contrasts with Sweden's positive GDP projections and stable monetary policy.
• Risk/commodities: As oil prices have recently surged, impacting currencies, the US dollar's decline correlates with rising energy costs, which is potentially beneficial for the Swedish economy.
• One macro factor: Sweden's GDP is projected to accelerate significantly in 2026, suggesting a strengthening economy compared to the US.
Range:
Expect USD/SEK to hold within its recent 3-month range, as it trades steadily at current lows.
What could change it:
• Upside risk: A surprising positive shift in US jobs data could boost the USD.
• Downside risk: Continued geopolitical tensions and reduced US asset attractiveness could lead to further USD weakness.
