Despite its recovery in recent sessions, the Swedish krona remains the worst performing G10 currency in the year to date. Economists at Rabobank have a fair amount of confidence that the Riksbank will be pivoting towards a less dovish policy stance, providing a tailwind for the SEK.

SEK to remain reactive to headlines regarding the conflict in Ukraine

“Expectations that the Riksbank has little option but to adopt a less dovish tone going forward are SEK supportive.”

“On balance we have adjusted lower our three-month EUR/SEK forecast to 10.40. While there is scope for a stronger SEK, we recognise that the actual path for the currency will be hugely contingent on the war.”