Macro and Markets Forecast Edition

Nordea projects a weaker US Dollar toward 2027 as the ECB proves more decisive than the Fed, despite temporary support for the USD from high Treasury yields.

Key Takeaways

• 1.The ECB is expected to be more aggressive in hiking rates (4 projected) than the Federal Reserve (on hold), leading to a structural weakening of the USD.
• 2.The Norwegian Krone (NOK) is the best G10 performer YTD but faces a temporary correction in the summer due to Norges Bank's NOK sales and reduced petroleum company demand.
• 3.The Swedish Krona (SEK) is in a 'limbo' state as energy prices drain European consumers and capital rotates toward the US due to AI and war-related volatility.

Table of Contents

• Short-term NOK correction
• Key risks
• SEK – down in “temporary” limbo
• Conclusion
• Nordea FX-forecasts

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