EUR/SEK confined in tight range, focus on ECB, Riksbank

The EUR/SEK currency pair was stuck within a narrow daily range on Wednesday ahead of the outcome of the European Central Bank’s and Sweden’s Riksbank policy meetings.

The European Central Bank is largely expected to keep its main refinancing operations rate intact at 2.15% at its December 18th policy meeting.

And, the ECB deposit facility rate is expected to be kept at 2.00%.

ECB policy makers continued to argue that the current stance remained appropriate and that short-term inflation deviations did not require a response.

ECB officials have stressed that the next move could go either direction, reinforcing their neutral posture. Recent economic data supported this view, while markets have begun assigning a modest probability to a rate hike next year.

With the economic and inflation outlook broadly in line with the ECB’s September forecasts, several policy makers argued that the monetary easing cycle might have already reached its endpoint, as long as current favorable conditions are present.

Meanwhile, Riksbank is expected to leave its key policy rate intact at 1.75% at its December 18th meeting.

In November, policy makers signaled that borrowing costs would likely remain at this level for some time.

Inflation continues to be above the central bank’s 2% medium-term target. Yet, it has eased broadly in line with the September projection, solidifying the view that the current price pressures are temporary.

The EUR/SEK currency pair was last up 0.10% on the day to trade at 10.9345.