USD/SEK settles below 1-week high, posts weekly loss

The USD/SEK currency pair settled below recent high of 9.4464, its strongest level since September 26th, after data showed US services sector activity had unexpectedly stalled in September.

The ISM Services Purchasing Managers’ Index dropped to 50.0 in September from 52.0 in August.

The latter came after earlier data by ADP showed US private payrolls had decreased by 32,000 in September following a revised down 3,000 drop in August.

The ongoing US government shutdown hampered public economic activity, risked job cuts and delayed crucial economic data, including the Non-Farm Payrolls report, ahead of the upcoming Federal Reserve policy meeting.

Markets are now pricing in about a 98% chance of a 25 basis point Fed rate cut in October and an 87.5% chance of another 25 bps cut in December.

Meanwhile, Sweden’s services sector has recorded the strongest growth since August 2022 in September, the latest data by Swedbank showed.

The Services Purchasing Managers’ Index was reported at a reading of 57.7 in September, up from a revised up 53.8 in August.

“The service sector has had difficulty establishing itself in the growth zone but is now showing signs of a clear recovery, although the September outcome should not be overinterpreted. Lower interest rates from the Riksbank and an expansionary fiscal policy may in the long term lift the service sector, something that may be reflected in the strong September figures,” Swedbank analyst Jörgen Kennemar said.

The exotic Forex pair lost 0.48% for the week.