AI investment boom reaches Europe's currency market, and the two biggest winners are ...

The surge in artificial intelligence (AI) investment is beginning to influence currency markets in Europe. According to an analysis by news agency Reuters, investment boom in artificial intelligence is starting to be felt for the first time in currency markets across Europe, and analysts reckon Swedish crown and sterling stand to benefit the most.

The $10 trillion-a-day foreign exchange (FX) market has been shaped by a weakening U.S. dollar this year, driven by tariff concerns and expectations of U.S. interest rate cuts. However, the ripple effects of AI, which has propelled stock markets to record highs, are now impacting currencies.JPMorgan analysts note that the Swedish crown (Krona) and sterling have shown resilience in recent months, partly due to significant AI investments in Sweden and Britain.

"Sweden and the UK stand out in terms of AI investment, providing a tailwind to their currencies, even if modest," a JPMorgan spokesperson told Reuters.

UK and Sweden lead AI investment destinations in Europe

According to Stanford University’s AI index, the UK and Sweden each attracted over $4 billion in private AI investments last year, ranking third and fourth globally behind the U.S. and China. The Swedish krona has been the top-performing major European currency against the dollar in 2025, rising nearly 15%, while sterling has gained 7%.

Analysts caution that isolating AI’s precise impact on currency movements is challenging due to factors like interest rate expectations and fiscal concerns, particularly for sterling."Large AI investments announced in both countries could certainly have created some demand for sterling and the Swedish crown, contributing to their resilience," Jane Foley, Rabobank’s head of FX strategy, told the news agency.

The Krona has also strengthened against the euro and other Scandinavian currencies, while sterling has weakened against the euro and Swiss franc due to fiscal uncertainties. Foley explained that AI investments in Swedish companies, which increase demand for the krona, can cause noticeable currency spikes.

However, sterling’s response is less pronounced because it is the world’s fourth most-traded currency, accounting for over 10% of global FX trades, compared to the krona’s less than 2%, per the Bank for International Settlements.In September 2025, Britain and the U.S. reportedly signed a technology pact, with U.S. firms, led by Microsoft, pledging £31 billion ($42 billion) in UK investments. In Sweden, AI giant Nvidia plans to supply its data center platform to companies like Ericsson and AstraZeneca, while Microsoft, Meta, Alphabet, and Brookfield Asset Management are planning data centers, leveraging Sweden’s reliable electricity and infrastructure.

These developments create a favorable environment for both currencies, analysts say.A report by SEB earlier this year showed Swedish FX market participants holding near-record overweight positions in the krona. Kenneth Broux, Societe Generale’s head of corporate research for FX and rates, said that U.S. tech investment pledges could reduce pessimism ahead of Britain’s November 2025 budget, where tax hikes are expected, boosting sterling’s appeal. He added that AI-driven “reskilling and upskilling” could mitigate pressures on welfare and unemployment benefits in aging Western economies.