Live Markets: Swedish crown weakness on the horizon

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24/06/2025 10:55

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SWEDISH CROWN WEAKNESS ON THE HORIZON

Sweden's crown has been the best performing major currency against the dollar this year, but Citi believes recent weakness can continue as they believe the drivers of the currency have fully played out.

The SEK  is up over 15% against the dollar in 2025 and almost 4% against the euro.

Citi believes there are three main drivers:

1/  Expectations that earlier Riksbank cuts would lead to an economic rebound and fewer cuts in the future

2/ Reallocation and hedge ratio adjustments given large overweight to U.S. assets

3/ Beneficiary from increased EU military spending given its domestic industry

"We see all these reasons as now having fully played out and being well priced by markets," writes Citi.

The bank sees EUR/SEK EURSEK=D3 rising towards 11.25 and potentially as high as 11.40-11.50. It was last at 11.07.

"We would buy dips into the low 11s ahead of June 26 data," Citi adds, referring to Thursday's trade, producer prices and consumer confidence figures.

(Samuel Indyk)

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EARLIER ON LIVE MARKETS:

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