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Investing.com -- UBS has revised its 2025 year-end EUR/SEK forecast to 10.75 from the previous 10.50, while maintaining its 2026 year-end forecast at 10.60.
For the third quarter, UBS targets EUR/SEK at 10.90, with a potential range of 10.75-11.30. When considered alongside UBS’s bullish EUR/USD outlook, this translates to USD/SEK forecasts of 9.08 in Q3, 8.74 by the end of 2025, and 8.98 by the end of 2026.
The adjustment reflects changing relative outlooks between the Riksbank and the European Central Bank. The Riksbank began the year with guidance for a terminal rate of 2.25%, which it reached in January. This stance remained unchanged until June, when the Swedish central bank unexpectedly pivoted to a more dovish position.
At its June meeting, the Riksbank cut its policy rate to 2.00%, revised its long-term rate forecast down to 2.01%, and signaled the possibility of a further cut to 1.75% later this year before returning to the long-term rate.
The central bank’s shift was driven by significantly downgraded growth expectations amid uncertainty surrounding tariffs and geopolitical developments. While some Swedish manufacturers have cited the stronger krona as challenging for profitability, the Riksbank does not view currency strength as problematic for the overall economy, noting it benefits businesses that import goods.
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