Bank of America (NYSE:BAC) (BofA) analysts expressed confidence in the continued strength of the Swedish Krona (SEK), projecting it to appreciate further against the Euro (EUR) and the US Dollar (USD).
BofA revised its year-end forecasts for the currency pairs, expecting EUR-SEK to reach 10.40, down from their previous prediction of 11.10. Similarly, the USD-SEK forecast was adjusted to 9.04 from 10.09.
The bank also updated its expectations for the Norwegian Krone (NOK), albeit with more conservative adjustments. The year-end forecast for EUR-NOK was set at 11.00 compared to the earlier estimate of 11.30, and for USD-NOK, the forecast is now at 9.57, down from 10.18.
In the short term, BofA anticipates the NOK-SEK exchange rate to experience downward pressure, forecasting it at 0.91 by mid-year before recovering to 0.95 by the end of the year. This marks a shift from their previous forecast of 0.98.
The analysts noted that higher tariffs pose risks to both the SEK and NOK. However, they emphasized that the SEK could be more vulnerable to such external economic factors, which in turn could influence the forecast profiles for the EUR against Scandinavian currencies.
Despite these potential risks, BofA’s outlook suggests a bullish scenario for the SEK in the near term.
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