The USD/SEK currency pair hovered above a 2-week low of 9.3430 on Wednesday 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 June 16th-17th meeting, following three successive rate cuts last year.
The minutes of the Federal Reserve’s April policy meeting showed that most officials judged additional policy firming would likely be warranted if inflation continued to run persistently above the 2% objective.
Policy makers broadly agreed that inflation risks were tilted to the upside and acknowledged that developments in the Middle East could significantly shift the balance of risks and complicate the appropriate policy path.
Although the US and Iran have agreed to a provisional peace deal, oil prices are still holding above pre-war levels.
Market participants will be scrutinizing the subsequent press conference for indications of how newly installed Fed Chair Kevin Warsh plans to steer the central bank in the period ahead.
They will also be paying close attention 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 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.
The USD/SEK currency pair was last down 0.02% on the day to trade at 9.3562.
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