SEK outperforms G10 peers as 2026 begins – Rabobank

The Swedish Krona (SEK) remains strong in early 2026, trailing only the AUD among G10 currencies, supported by positive growth data, attractive interest-rate differentials, and expectations of future Riksbank hikes, Rabobank’s FX analyst Jane Foley reports.

Riksbank expected to follow RBA with gradual rate hikes

“The SEK was the best performing G10 currency in 2025, by a decent margin and it remains on the front foot so far this year. Measured against its G10 peers, the SEK is the second-best performer behind the AUD in the year to date. While the AUD will have taken some encouragement from the strength of regional equities and metal prices this year, it has also found support in speculation that the RBA may be the first G10 central bank to hike rates this cycle.”

“Market pricing suggests the Riksbank may not be too far behind. Indeed, on the back of an encouraging growth outlook, market pricing also expects that the next policy move from the Riksbank will likely be a hike, albeit not for some months. Although the market is currently only priced for around 15 bp of Riksbank rate hikes on a 1-year view, this is more hawkish than market expectations for the ECB.”

“In view of attractive of interest rate differentials and Sweden’s positive growth and budget backdrop, we expect the SEK to have another good year in 2026 and look for EUR/SEK to continue its descent to 10.50 with downside risk in the year ahead.”