UBS has increased its price targets for the EUR/SEK currency pair, reflecting continued pressure on the Swedish krona despite robust domestic fundamentals in Sweden.
The bank raised its December target for EUR/SEK to 11.00 from 10.50, with quarterly forecasts through September 2027 also adjusted higher. The March 2027 forecast was lifted to 10.90 from 10.40, June 2027 to 10.70 from 10.30, and a new September 2027 target of 10.60 was introduced.
UBS attributed the krona's underperformance to broader market dynamics, noting that a more favorable outlook for the currency would require the Federal Reserve to fully price out expected rate hikes, reducing pressure on lower-yielding currencies. The Riksbank is expected to maintain its current interest rate stance, while the European Central Bank is projected to raise rates in September.
In contrast, the Norwegian krone remains supported by a favorable carry profile within the G10 group of currencies. UBS maintained its Norwegian krone forecasts, with quarter-end targets set at 10.70, 10.60, and 10.50 through June 2027, and a new September 2027 target of 10.50. The outlook reflects the Norges Bank's hawkish stance and Norway's position as a net energy exporter, with expectations of one final rate hike aligning with ECB policy moves to keep the rate differential stable.
