Kronrally i sikte även 2026 – Sverige pekas ut som vinnare

Sweden’s krona looks set for a strong 2026 after beating all major currencies this year, as the country’s economy is enjoying a renaissance.

The krona has climbed more than 5% against the euro, its best performance since 2010, and its near 20% gain against the dollar is the most in over two decades. The likes of JPMorgan Chase & Co. and Bank of America Corp. see that run continuing next year, albeit at a more modest pace.

It’s a turnaround for a volatile currency that was near a lifetime low against the euro at the start of 2025, after being battered by a combination of slowing Swedish growth and high inflation. The central bank has since slashed interest rates, and with the economy picking up, speculation over a shift to policy tightening is keeping analysts positive.

“We are bullish krona for 2026,” said Alex Cohen, a strategist at Bank of America, who expects it to gain nearly 4% against the euro by the end of next year to 10.50 per euro.

Central to this view is the outlook for Sweden’s economy. Gross domestic product is projected to grow at nearly twice the European Union’s average rate in 2026, after surging at its fastest pace in more than two years in the third quarter.

That’s been fueled by the central bank cutting borrowing costs by more than half since it started an easing cycle last year, and the Riksbank is now expected to hold at 1.75% this week and into 2026. Both the monetary and fiscal stimulus are aiding the krona, according to JPMorgan strategists including Meera Chandan, who see a near 3% gain against the euro next year.

There’s a growing group of economists who expect a shift to monetary tightening in late 2026, mirroring a trend being seen in money markets from Europe to Australia. That would be a fillip for the krona, especially against the greenback, given the Federal Reserve is expected to cut rates next year.

Sweden’s currency, which has among the smallest trading volumes among Group-of-10 peers, often benefits during periods when stocks and other high-risk assets are rallying.

Meanwhile, there are other secular trends that look set to bring money to Sweden’s economy. Europe’s race to rearm itself is benefiting local industrial companies such as Saab AB, whose shares have more than doubled this year.

The European defense spending boost where “Sweden is the natural beneficiary” is a driver for the krona, said David Adams, head of G-10 currency strategy at Morgan Stanley. However, the currency is unlikely to “have the same impressive run that it had this year,” he said. Overall, analysts in a Bloomberg survey see gains of over 2%.

Commerzbank AG, the best forecaster for the krona in the latest Bloomberg ranking, concluded that it will appreciate only slightly going forward as the rally is running out of steam. Goldman Sachs Group Inc. economist Katya Vashkinskaya thinks current market pricing “overstates” the chances of rate hikes next year.

Others are betting on bigger gains. The krona may test 10.50 against the euro if the market starts materially pricing in hikes next year, said Jeremy Stretch, chief international strategist at Canadian Imperial Bank of Commerce.

Even aside from the monetary policy argument, fiscal spending in an election year is likely to be supportive. An increase in borrowing will finance stimulus as the nation heads toward the vote in September, spurring inflows of foreign capital and helping the krona, according to Amanda Sundstrom, a strategist at SEB AB, Sweden’s largest bank by market size.

“We see a potential for an increase of interest in Swedish assets, including sovereign bonds, in coming years, making the Swedish krona more liquid,” she said. “If that trend gets going, maybe Swedish pension funds will invest more domestically, which will also benefit the krona.”

--With assistance from Carter Johnson.

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