USD/SEK settles above 2-week low, posts weekly loss

The USD/SEK currency pair settled above recent low of 9.4133, its weakest level since June 13th, as market players wagered that the Federal Reserve would likely lower interest rates more times and probably sooner than previously anticipated.

Annual core PCE inflation in the US picked up to 2.7% in May from a revised up 2.6% in April, data by the Bureau of Economic Analysis showed.

And, annual PCE inflation accelerated to 2.3% in May from a revised up 2.2% in April.

But, US consumer spending surprisingly dropped in May as the boost from the preemptive purchases of goods such as motor vehicles ahead of tariffs waned.

Markets are now pricing in about 65 basis points of rate cuts by the Federal Reserve by the end of this year, compared to 46 basis points a week ago.

In the meantime, media reports stated that US President Trump could announce his Fed Chair nominee as early as September or October, as he would likely favor a candidate who supports looser monetary conditions.

Fed Chair Jerome Powell said this week the absence of new tariffs supported disinflation and created room for several rate cuts in case extensive levies are held off after the July 9th deadline.

Elsewhere, Sweden’s trade surplus has narrowed to SEK 3.9 billion in May from SEK 10.6 billion in the same month of 2024. It has been the smallest surplus since December 2024, data by Statistics Sweden showed.

Total exports shrank 9.6% year-on-year to a five-month low of SEK 169.6 billion.

The USD/SEK currency pair settled 0.18% lower at 9.4722 on Friday.

The exotic Forex pair lost 1.89% for the week.