The USD/SEK currency pair hovered just above a fresh two-week low of 10.0063 on Tuesday, as market players’ main focus was the upcoming reciprocal tariffs, promised by the Trump administration on April 2nd.
Although US President Trump said yesterday that automobile tariffs were coming soon, he also indicated the reciprocal tariffs might be less severe than feared. Markets, however, remained edgy.
“Only Covid caused more concern over policy uncertainty at the global level. We are currently facing numerous sources of risks, with the risk of trade war escalation standing out as the key item to watch,” Benoit Anne, senior managing director at MFS Investment Management’s strategy and insights group, was quoted as saying by Reuters.
On the cenbank monetary front, Atlanta Federal Reserve President Raphael Bostic said he expected progress on inflation to slow in the months ahead. Therefore, he now expects just a 25 basis point rate cut by the end of this year.
US PCE inflation figures, due out on Friday, may provide more clues on the Federal Reserve’s interest rate cut path.
Meanwhile, Sweden’s Riksbank left its key policy rate intact last week, citing a largely unchanged inflation and GDP growth outlook.
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 also kept borrowing costs without change and signaled no rush to cut interest rates.
On the data front, producer prices in Sweden reportedly increased at an annualized rate of 3.4% in February, slowing from 3.5% in January.
The USD/SEK currency pair was last losing 0.91% on the day to trade at 10.0075.
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