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 report noted that the Swedish Krona (SEK) is the weakest G10 currency so far this year. It linked this to recent underperformance versus other G10 currencies, despite Sweden’s growth forecast.
Societe Generale said the SEK could be a candidate to buy if a ceasefire were announced. The article was produced using an artificial intelligence tool and checked by an editor.
Last year, we noted that Sweden was forecast to be the only G10 economy that would outgrow the US. Despite this strong outlook, the Swedish Krona was the weakest G10 currency at the time. The thinking was that any positive geopolitical news would make the SEK a strong candidate to buy.
That growth story did materialize, with Sweden’s economy expanding by 2.8% in 2025, just outpacing the US’s resilient 2.5% figure. As expected, the Riksbank raised its policy rate to a high of 4.25% in November 2025 to fight inflation. The SEK saw a brief rally when geopolitical tensions eased in January, but the gains did not hold for long.
The situation has now inverted as we move through April 2026. The impact of those previous rate hikes is becoming clear, with Sweden’s latest manufacturing PMI for March falling to 48.5, indicating a slowdown. The market is now pricing in a greater than 60% probability of a Riksbank rate cut by June.
For derivative traders, this means positioning for potential Krona weakness in the near term. Buying EUR/SEK call options would allow traders to profit from a weakening SEK, with risk limited to the option’s premium. Selling the SEK through forward contracts against the euro or dollar is another way to position for the Riksbank potentially cutting rates before other major central banks.
