The USD/SEK currency pair settled above recent low of 8.7357, its weakest level since November 15th 2021, in the wake of the Federal Reserve’s and Sweden’s Riksbank policy decisions.
Meanwhile, the US Dollar regained strength markedly after US President Trump confirmed his nomination of Kevin Warsh as the next Federal Reserve Chair.
The Fed left its federal funds rate target range intact at 3.50%-3.75% at its January 27th-28th meeting, in line with market consensus, following three successive rate cuts last year that brought borrowing costs to their lowest level since 2022.
Yet, Governors Stephen Miran and Christopher Waller voted against the policy decision, favoring another 25 bps reduction.
FOMC policy makers highlighted that economic activity had been expanding at a solid pace, job growth had remained slow, while inflation had remained somewhat elevated.
At the regular press conference, Fed Chair Powell noted the US economy was coming into the new year on a firm footing and current interest rates were appropriate to promote progress toward both of the US central bank’s objectives.
Powell also said that the central bank was “well-positioned” to evaluate incoming data on a meeting-by-meeting basis without adhering to a predetermined rate path.
In Sweden, Riksbank left its key policy rate intact at 1.75% at its January meeting, in line with market consensus.
Policy makers again indicated that borrowing costs would likely remain at this level for some time, as they assess the impact of the current policy stance.
Still, Riksbank warned that uncertainty over inflation and growth had risen, driven in part by geopolitical tensions and shifts in US trade and foreign policy.
The exotic Forex pair lost 0.33% for the week.
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