The CHF/SEK currency pair hovered above a 2-week low of 11.7841 on Tuesday ahead of the outcome of Sweden’s Riksbank and the Swiss National Bank’s policy meetings.
Sweden’s Riksbank is expected to leave its key policy rate intact at 1.75% at its June 17th meeting.
In May, policy makers noted that the risk of the war in the Middle East leading to higher inflation had risen.
Sweden’s annual consumer inflation has picked up to its highest level since October 2025 in May.
Consumer prices rose 0.8% year-on-year in May, rebounding from a 0.1% drop in April and exceeding the market forecast of a 0.5% rise.
Sweden’s consumer price index with a fixed interest rate (CPIF), Riksbank’s target variable for inflation, went up 1.5% year-on-year in May, again surpassing expectations of a 1.3% increase.
Inflation has remained below target, while recent macro data have come in significantly weaker than the Riksbank’s March projection.
As economic activity remains subdued, the central bank had said it saw room to wait for a clearer assessment of the impact of the Middle East conflict and the supply shocks associated with it.
Meanwhile, the Swiss National Bank is expected to keep its policy rate without change at 0% at its June 18th meeting.
Low inflation has given policy makers room to stay cautious. Annual consumer price inflation in Switzerland held at 0.6% in May. While this print matched the prior reading and represented the highest level since late 2024, it fell short of the 0.8% consensus estimate, prompting market participants to reassess the likelihood of a near-term SNB rate hike.
The SNB’s latest projections point to average inflation of 0.5% in 2026 and 2027, and of 0.6% in 2028. This suggests that policy makers see little need for tighter policy.
The SNB has also reaffirmed its readiness to intervene in the Forex market if needed.
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