USD/SEK trades near 6-week high ahead of Riksbank decision

The USD/SEK currency pair traded in proximity to recent six-week peak on Tuesday ahead of a rate decision by Sweden’s Riksbank, while investors were also eyeing Friday’s report on US PCE inflation that could affect Fed rate cut expectations.

The US core Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation measure, is expected to have risen 0.3% month-over-month in February.

In year-on-year terms, the core PCE Price Index probably rose 2.8% in February, or at the same pace as in January. It has been the lowest annual core PCE inflation since March 2021.

Meanwhile, SEK traders now look to the outcome of Riksbank’s March policy meeting on Wednesday.

Sweden’s central bank is expected to keep its key policy rate intact at 4.0%.

In February, the central bank reiterated that past rate hikes had alleviated concerns over high inflation.

The bank’s Executive Board said it saw less risk of inflation becoming entrenched at dangerously high levels.

Riksbank also suggested that a rate cut could come earlier than previously expected, possibly even in the first half of this year.

Currency Pair Performance

As of 9:35 GMT on Tuesday the USD/SEK currency pair was edging down 0.10% to trade at 10.5464.

Yesterday the exotic Forex pair went up as high as 10.5983. The latter has been the pair’s strongest level since February 13th (10.6005).