The NOK and SEK remain the weakest link in the G10 sphere. Both currencies could stabilize into the summer, but downside risks remain in place, economists at Nordea report.

A normalization of global interest rates should lead to a somewhat stronger SEK and NOK

“While both the Riksbank and Norges Bank will have to follow suit with the ECB and Fed to prevent further weakening of their currencies, this will likely not be enough to help the SEK and the NOK during periods of risk-off. Thus, while we think the SEK and the NOK will move broadly sideways until the summer, the risk is clearly to the downside.”

“Longer out, a normalization of global interest rates should lead to a somewhat stronger SEK and NOK against the EUR. However, we (still) see them both remaining weak in a historical context.”