The SEK has been one of the hardest hit G10 currencies since the USD started to rebound in mid-July. Economists at MUFG Bank analyze Krona’s outlook.
SEK to rebound after heavy sell-off over summer
After failing to break above the 11.20 level in recent months, we expect the USD/SEK pair to correct lower towards support at the 200-DMA at just below 10.70.
With the USD in the process of peaking out alongside US yields, conditions are falling into place for at least a relief rally for the SEK.
The SEK is deriving support as well from the Riksbank’s FX reserve hedging program.