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USD/SEK Held Steady After Riksbank Minutes Released - Look Ahead

USD/SEK Held Steady After Riksbank Minutes Released - Look Ahead

Dimitri Zabelin, Analyst


What's on this page


  • USD/SEK did not significantly react to central bank minutes
  • Riksbank taking gradualist approach with cautious undertones
  • 2019 headwinds may cause Riksbank to delay possible 2019 hike

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USD/SEK remained steady as the Riksbank – Sweden’s central bank – released the minutes from its December policy meeting. Swedish officials stated they intend on raising rates at least once this year in the latter half, with approximately two rate hikes per year starting in 2020.

USD/SEK – 3-Minute Chart

USD/SEK - 3 Minute Chart

Riksbank officials are opting to adopt a gradualist approach and conveyed cautious undertones as policymakers look at the potential headwinds in 2019. Some of these include the US-China trade war and forecasts of slower growth as outlined by the World Bank’s Global Economic Prospects report. Political turmoil in the EU – such as Brexit and the Italian budget crisis – along with slower economic growth in the region were among other concerns cited in the minutes.

Domestic economic data has also been a source of concern. “Outcomes for GDP growth and inflation have been weaker than expected”, one official commented, and forecasts for inflation have been revised down for the next few years. Many of these risks have been a reoccurring theme and were mentioned in the October policy meeting as well.

However, despite the “gloomy” October data, most board members believe that inflation expectations and CPIF are close to their official objective. The Riksbank’s mandate is to achieve and maintain an inflation target at two percent. The central bank elected to raise rates for the first time in seven years on December 20 on the basis that inflationary pressures have risen sufficiently enough for the economy to withstand a rate hike. This was done despite the objection by Riksbank Governor Per Jansson.

There is also the possibility the Riksbank raised rates in December rather than February because policymakers wanted to squeeze in at least one rate hike incase 2019 headwinds began to blow early.

There is still “mounting downside risk” as stated by Riksbank Governor Per Jansson, with reference to risks associated with the Swedish housing market and high level of household indebtedness.

Looking ahead, the Riksbank will be closely watching Sweden’s unprecedented political gridlock that has gripped the country since the elections in September. They will also be closely watching the developments in the trade wars and shifting political economy in the EU.

USD/SEK in this environment will likely continue to trend higher despite the recent downward movement past 8.9165. It appears to have bounced off the 8.8469 support and is aiming for 8.9529. The pair have risen over nine percent since the start of the year and have been consistently trading above and within the 8.9529-9.0083 range since October.

USD/SEK – Daily Chart

USD/SEK - Daily Chart

For more updates on USD/SEK and other Nordic assets, follow me at @ZabelinDimitri to stay up to date.


--- Written by Dimitri Zabelin, Jr Currency Analyst for

To contact Dimitri, use the comments section below or @ZabelinDimitri on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.