USD/SEK settles below 3-week high, posts weekly gain

The USD/SEK currency pair settled below recent high of 9.6952, its strongest level since May 29th, in the wake of Riksbank’s and the Federal Reserve’s policy decisions.

Sweden’s Riksbank lowered its key policy rate by 25 basis points to 2% at its June meeting, in line with market consensus.

The central bank highlighted slowing economic recovery and easing inflation pressures as a basis for its decision. The rate cut aims to stabilize inflation at Riksbank’s target and stimulate the economy.

Riksbank noted that global uncertainty, stemming from global trade tensions and the escalating Middle East conflict, continued to weigh on the outlook.

The Swedish central bank also flagged another possible rate cut later in 2025.

In the meantime, the Fed kept its federal funds rate target range without change at 4.25%-4.50% at its June meeting, in line with market consensus.

Fed policy makers have taken a cautious stance to fully evaluate the economic impact of the Trump administration’s policies concerning tariffs, immigration and taxation.

The central bank highlighted that uncertainty over the economic outlook had diminished, but was still elevated.

The Federal Reserve still projects two interest rate cuts this year, despite slowing growth and persistent inflation pressures.

The US central bank revised down its 2025 GDP growth forecast to 1.4% from 1.7% in the March projection. And, the 2026 forecast was revised down to 1.6% from 1.8% previously.

Additionally, annual core PCE inflation forecasts were revised up, as follows:

– for 2025 – to 3.0% from 2.7%;
– for 2026 – to 2.4% from 2.2%;
– for 2027 – to 2.1% from 2.0%.

The USD/SEK currency pair settled 0.30% higher at 9.6548 on Friday.

The exotic Forex pair gained 2.00% for the week.