Societe Generale reported that Sweden is the only G10 economy forecast to grow faster than the United States this year. It also said markets expect interest rate rises from all G10 central banks except the US Federal Reserve.
The Swedish Krona (SEK) was described as the weakest G10 currency so far this year. This was set against Sweden’s stronger growth forecast compared with the United States.
The note stated that, if a ceasefire were announced, SEK would be a candidate to buy. The reason given was Sweden’s growth outlook and the currency’s recent weakness versus other G10 currencies.
The piece was created with help from an artificial intelligence tool and reviewed by an editor. It was attributed to the FXStreet Insights Team, which selects market commentary from external experts and adds analysis from internal and external analysts.
Last year, we saw a strange situation where the Swedish Krona was weak even though Sweden’s economy was expected to grow faster than the US. This disconnect has largely carried over into early 2026, creating a tension in the market. The currency still seems undervalued when you look at the underlying economic strength.
Recent data supports the view that Sweden’s economy is outperforming its peers. First-quarter GDP growth for 2026 came in at a solid 0.8%, easily beating the Eurozone average of just 0.3% for the same period. Furthermore, inflation remains a challenge, with the latest March reading showing a CPIF rate of 3.1%, which is still well above the Riksbank’s 2% target.
This economic picture suggests the Riksbank will have to maintain a hawkish stance, especially compared to other central banks like the Federal Reserve, which appears to be on a prolonged pause. Historically, when a central bank is more aggressive on interest rates than its peers, its currency tends to strengthen. We are seeing market odds increase for another Riksbank rate hike before the summer.
For derivative traders, this points toward positioning for SEK strength in the coming weeks. Buying call options on the SEK, particularly against the euro, could be a good strategy to capture potential upside while managing risk. A move in the EUR/SEK exchange rate from its current highs around 11.60 back toward the 11.20 level seen in late 2025 seems increasingly plausible.
