LIVE MARKETS-Swedish krona has more room for upside

Reuters
Oct 10
LIVE MARKETS-Swedish krona has more room for upside

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SWEDISH KRONA HAS MORE ROOM FOR UPSIDE

BofA Global Research says Swedish krona's SEK= rally has room to run, with the currency being the best performer among G10 FX, gaining more than 15% against the dollar so far this year.

The Wall-Street brokerage expects krona's rally will be aided by both external and domestic factors.

On the external front, BofA expects a weaker U.S. dollar, supportive risk sentiment, positive spillovers from Germany's fiscal boost and European defence spending alongside some insulation from France's political volatility to boost the currency.

The dollar index .DXY has fallen over 8% so far this year, hurt by President Donald Trump's tariff policies and his renewed calls for aggressive monetary policy easing and expectations of interest rate cuts.

"On the domestic front, we anticipate stronger growth in Sweden vs. the Euro area, given Sweden's weaker starting point, higher rate sensitivity, and consumer-oriented fiscal push," BofA said, adding that they also expect a more hawkish stance from the Riksbank vs the ECB, given market pricing.

"On the flows side, asset Managers can support SEK more," BofA noted.

BofA forecasts krona to hit 8.92 per dollar by year-end and 8.40 by 2026-end.

(Siddarth S)

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