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The Swedish krona moved sideways after the latest interest rate decision by Riksbank. The USD/SEK exchange rate was trading at 10.50 on Thursday, down sharply from the year-to-date high of 11.27. It is hovering at the lowest point since July 23rd. The EUR/SEK pair was trading at 11.45, its lowest point since July 13th.
 Riksbank surprise rate pauseThe biggest forex news on Thursday was the latest rate decision by Sweden’s Riksbank, the world’s oldest central bank. In it, the bank decided to leave interest rates unchanged at 4.0%, the second straight month of pause. Riksbank, like other central banks, has been on an aggressive path of hiking interest rates in a bid to lower inflation. It has hiked rates from zero during the pandemic to the current 4%. Most analysts were expecting it to deliver another 0.25% rate hike.

The #Riksbank’s unanimous decision to hold rates unchanged at 4% see’s the #Krona fall almost -1% against the Euro. $EURSEK rises to 11.4620.

Find out more here: https://t.co/rJs6zkr8GQ#forex pic.twitter.com/XrKDnXU88K

— Saxo (@saxobank) November 23, 2023
Riksbank decided to pause its hikes because of the recent strength of the Swedish krona against the euro, sterling, and the greenback. Also, the central bank is succeeding in lowering inflation. The most recent data showed that the Swedish inflation remained intact at 6.5% in October, lower than the expected 6.7%. Inflation has been in a downtrend after peaking at over 12% in 2022. It sees inflation averaging at 4.4% in 2024 and 2.4% in 2025.The challenge for Riksbank is that the economy is not growing as fast. For example, the unemployment rate remains above 7% and the bank expects it to rise to 8.6% in 2024 and 8.5% in 2025.Riksbank believes that the Swedish economy will contract by 0.7% this year followed by 0.2% in 2024. It will then bounce back in 2025.
 EUR/SEK technical analysis EUR/SEK chart by TradingViewThe EUR/SEK and USD/SEK have a close correlation since they all have the Swedish krona as the countercurrency. On the daily chart, we see that the EUR/SEK formed an ascending channel, which is shown in blue. It recently moved below this channel. The 50-day and 100-day Exponential Moving Averages (EMA) have also formed a bearish crossover. It has also formed a triple-top pattern and moved below the crucial support at 11.47, the lowest level on September 29th.Therefore, the outlook for the pair is bearish, with the next support level to watch being at 11.0. The stop-loss of this trade is at 11.60. In the same case, the outlook for the USD/SEK pair is bearish, with its key target being at 10.15. This price is the lowest level in July, May, and January. It was also the lowest point in December 2022.More By This Author:Vista Outdoor Receives Business Combination Proposal From Colt
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