The Swedish Crown edged higher against the Euro after the country’s central bank signaled a number of rate hikes next year. Riksbank did point out, however, that the current ultra-loose policy would be tightened only gradually. The benchmark lending rate was held at the current -0.50%. According to one FX strategist in Paris, the announcement was slightly more dovish than markets had been anticipating and it appeared that the first two quarters of 2018 would continue to see some balance sheet expansion until tapering began in the second half of the year. Despite inflation in Sweden at or even above the 2% target, the Riksbank has maintained its dovish posturing, unlike other central banks.
As reported at 10:53 am (GMT) in London, the EUR/SEK was trading lower at 9.894 Crowns, down 0.50%; the pair had earlier hit a low of 9.85800 Crowns while the session peak stands at 9.95782. The GBP/SEK is also lower at 11.1887 Crowns, down 0.45% while the USD/SEK is 8.3536 Crowns, down 0.53%.
FX Roundup
In the Eurozone, the Euro managed to hold onto small gains despite the approval of the US tax reform bill in the United States Congress. Markets had already priced in just such an eventuality so there was little movement in the greenback as a result. In Japan, markets are awaiting the announcement from the Bank of Japan regarding its monetary policy. Analysts are anxious to see if the clues laid out by Haruhiko Kuroda which led to speculation that the current loose policy would be tapered, are finally made clear. The Bank of Japan’s current lending rate is set at -0.1%.