The USD/SEK currency pair settled below Friday’s high of 9.2491, its strongest level since January 5th, as the latest US macro data seemed to have curbed expectations for imminent interest rate cuts by the Federal Reserve.
Initial claims for unemployment benefits in the US fell by 9,000 to the seasonally adjusted 198,000 for the week ended January 10. The figure was below market consensus of 215,000 and also came in below the prior week’s level of 207,000.
The stronger-than-expected labor market report has reinforced the view that the Federal Reserve is likely to keep interest rates on hold over the coming months. Analysts at Morgan Stanley have shifted their anticipated timing of Fed rate cuts to June and September, from earlier expectations of January and April.
Still, political uncertainty around the Federal Reserve could limit US Dollar upside.
US President Donald Trump said on Wednesday that he had no current plans to dismiss Fed Chair Jerome Powell despite the Justice Department’s criminal investigation into Powell, while adding that it was “too early” to determine his ultimate decision.
Federal prosecutors threatened to indict the Fed Chair over his congressional testimony on a Fed building renovation project.
Meanwhile, Sweden’s annual consumer inflation has remained stable at 0.3% in December, confirming the preliminary estimate.
It has still remained well below the Riksbank’s 2% target and has been the lowest rate since May.
And, Sweden’s consumer price index with a fixed interest rate (CPIF), Riksbank’s target variable for inflation, went up 2.1% year-on-year in December.
The exotic Forex pair gained 0.16% for the week.
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