GBP/SEK settles below 3 1/2-week high, posts weekly gain

The GBP/SEK currency pair settled below Friday’s high of 13.0618, its strongest level since May 27th, in the wake of Riksbank’s and the Bank of England’s policy decisions.

Sweden’s Riksbank lowered its key policy rate by 25 basis points to 2% at its June meeting, in line with market consensus.

The central bank highlighted slowing economic recovery and easing inflation pressures as a basis for its decision. The rate cut aims to stabilize inflation at Riksbank’s target and stimulate the economy.

Riksbank noted that global uncertainty, stemming from global trade tensions and the escalating Middle East conflict, continued to weigh on the outlook.

The Swedish central bank also flagged another possible rate cut later in 2025.

In the meantime, the Bank of England left its benchmark interest rate without change at 4.25% at its June meeting, as it cited a challenging backdrop of heightened global uncertainty and persistent inflationary pressures.

Three MPC members voted in favor of a 25 bps rate cut to 4%.

The BoE said that consumer inflation was likely to remain broadly at current levels for the rest of 2025 before easing toward the target in 2026.

Still, the BoE warned of “two-sided risks to inflation,” expressing concern over rising energy prices amid escalating Middle East tensions and potential trade disruptions from US tariffs.

The GBP/SEK currency pair settled 0.29% higher at 13.0158 on Friday.

The exotic Forex pair gained 1.10% for the week.