SEK/NOK settles above 18-week low, posts weekly gain

The SEK/NOK currency pair settled above recent low of 1.0330, its weakest level since February 13th, in the wake of Riksbank’s and Norges Bank’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, Norges Bank lowered its key policy rate by 25 basis points to 4.25% at its June meeting, confounding market consensus of a hold.

The central bank has kept borrowing costs at a 15-year high of 4.50% since December 2023.

Norges Bank said it might deliver more rate cuts by the end of this year, in case the economy developed as expected.

Yet, it cautioned that heightened uncertainty prevented it from committing to a particular rate path.

The SEK/NOK currency pair settled 0.24% higher at 1.0447 on Friday.

The exotic Forex pair gained 0.08% for the week.