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USD/SEK confined in tight range as focus shifts to US jobs

The USD/SEK currency pair held mostly steady on Friday, trading within a narrow range, ahead of key US employment data later in the day, which will be closely watched for clues regarding the Fed’s rate outlook.

The exotic currency pair was poised to register a 0.69% weekly loss following central bank policy decisions.

Market focus now sets on the US Non-Farm Payrolls report due out at 13:30 GMT today. Employers in all sectors of the US economy, excluding farming, probably added 180,000 job positions in January, according to market consensus, following a job growth of 216,000 in December.

Earlier this week, the Federal Reserve kept the federal funds rate target range unchanged, while Fed Chair Jerome Powell pushed back on the idea that an interest rate cut could come as early as March.

Markets are now pricing in a 37.5% chance of a Fed rate cut in March, compared to a more than 70% chance a month earlier.

Meanwhile, joining other major central banks this week, Sweden’s Riksbank kept its key policy rate intact at 4.0% at its February meeting, as largely expected.

The central bank reiterated that past rate hikes had alleviated concerns over high inflation.

The bank’s Executive Board said it saw less risk of inflation becoming entrenched at dangerously high levels.

Riksbank also suggested that a rate cut could come earlier than previously expected, possibly even to the first half of this year.

Markets are now pricing in a rate cut by June and the key rate being at around 3.00% at the end of 2024.

As of 11:09 GMT on Friday the USD/SEK currency pair was inching up 0.01% to trade at 10.3727.

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