The USD/SEK currency pair headed for a weekly loss in the wake of the Federal Reserve’s and Riksbank’s policy decisions.
Sweden’s Riksbank left its key policy rate intact at 2.25% at its March meeting, highlighting a largely unchanged inflation and GDP growth outlook.
Policy makers said they expected inflation would remain above the 2% target for the rest of 2025 before stabilizing near that level in 2026.
At the same time, economic recovery is on track, underpinned by rising real wages, lower interest expenses and higher defense and government spending.
Still, policy makers cautioned that risks continued to persist – most notably, escalating US trade conflicts, geopolitical tensions in Europe, the Krona exchange rate as well as shifts in household spending and corporate investment.
Riksbank’s decision came one day after the Federal Reserve kept its federal funds rate target range without change and flagged two potential interest rate cuts by the end of 2025.
However, the central bank signaled no rush to cut borrowing costs.
“We’re not going to be in any hurry to move,” Fed Chair Jerome Powell said at the FOMC press conference following the latest policy announcement.
That pinpointed the challenge Fed policy makers face in navigating the Trump administration’s fluctuating tariffs and the potential impact of those policies on the US economy.
“As we head into the April 2 Trump reciprocal tariff announcement, there is an increased risk that market players trim back on USD shorts and look to run a more neutral position,” Chris Weston, head of research at Pepperstone, was quoted as saying by Reuters.
The USD/SEK currency pair was last little changed on the day to trade at 10.1113.
The exotic Forex pair has lost 0.11% so far this week.
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