The USD/SEK currency pair eased from a 15-week high of 9.4843 on Monday ahead of the outcome of the Federal Reserve’s and Sweden’s Riksbank policy meetings.
The Fed is largely expected to leave its federal funds rate target range intact at 3.50%-3.75% at its March 17th-18th meeting, following three successive rate cuts last year.
In January, 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.
The minutes from the Federal Reserve’s January meeting showed that FOMC officials were divided over the future trajectory of interest rates. Several policy makers signaled that further rate cuts would likely be appropriate in case inflation continued to subside in line with their projections.
Others said that it might be prudent to keep the policy rate on hold for some time. Some FOMC members even argued that rate hikes could become necessary in case inflation remained elevated.
Investors will also be paying close attention to the press conference with Fed Chair Jerome Powell for clues over the timing of future interest rate cuts as well as to the new set of FOMC economic forecasts.
Meanwhile, Sweden’s Riksbank is expected to leave its key policy rate intact at 1.75% at its March 19th meeting.
Policy makers had 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 USD/SEK currency pair was last down 1.00% on the day to trade at 9.3791.
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