|

Swedish Krona: Growth strong, currency soft – Societe Generale

Societe Generale’s Kit Juckes argues that Sweden’s strong growth and low inflation contrast with broader G10 dynamics, yet the Krona remains weak. He notes Sweden’s superior debt sustainability and recent data showing robust Gross Domestic Product (GDP) and minimal inflation. Despite real effective depreciation over two decades, he expects economic outperformance versus the Eurozone to eventually draw capital inflows and influence Swedish Krona (SEK) and inflation.

Krona cheap versus Euro and Pound

"... Krona has fared over the last year – rallying until February 2026 and then falling (EUR/SEK rising) in the period since then."

"In real effective terms, the krona is 6% above its 2023 lows, but it has lost 18% in real terms over the last 20 years."

"This morning’s data – core CPI inflation at 0.4% y/y and monthly GDP up 3.9% y/y, are pretty striking – even if monthly GDP data should be treated with suspicion."

"If all we look at are the inflation numbers, and nominal GDP, then the Krona is likely to remain soft."

"But the country’s economic out-performance relative to the Eurozone will attract capital inflows and will eventually have an impact on inflation."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Author

FXStreet Insights Team

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

More from FXStreet Insights Team
Share:

Editor's Picks

GBP/USD retreats below 1.3350; Fed Minutes in focus

GBP/USD struggles to find its footing and trades in negative territory below 1.3350, pressured by the renewed USD strength. US President Donald Trump said on the MoU signed with Iran to end the conflict was "over", causing safe-haven flows to dominate the action in financial markets. Later in the American session, the Fed will publish the minutes of the June policy meeting.

EUR/USD tests 1.1400 as USD gathers strength on Trump comments

EUR/USD comes under bearish pressure on Wednesday and declines toward 1.1400. US President Trump said the MoU signed with Iran to end the conflict was "over" and added that the didn't want to engage with Tehran anymore, triggering a flight-to-safety and boosting the USD.

Gold drops below $4,100 as Middle East tensions escalate

Gold turns south on Wednesday and trades deep in negative territory near $4,050 on Wednesday. Investors adopt a cautious stance and help the USD gather strength after US President Trump said at the NATO summit that the MoU signed with Iran to end the conflict was "over" and added he didn't want to engage with Tehran.

Pi Network crashes to a record low amid broader market stress

Pi Network (PI) price edges toward $0.1000 extending losses for the fifth straight day. Retail sentiment remains bearish as Open Interest and the funding rate decline. The technical outlook for PI is bearish as selling pressure mounts, despite oversold conditions.

WTI surges above $74 as Trump confirms MoU with Iran is over

West Texas Intermediate (WTI) soars 3.2% to near $74.30 during the European trading session, the highest level seen in two weeks. The oil price surges as the confirmation, from the US President Donald Trump that the MoU with Iran is over, has revived risks of global energy supply disruption.

Bye, forward guidance: How to trade when central banks choose silence

Central banks have spent years telling markets what might come next. Now, traders face the possibility that they say a lot less. From the Federal Reserve to the European Central Bank and the Bank of England, policymakers are pushing back against forward guidance.