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Krona Languishes After Sweden's Central Bank Cuts Rates by 25bps, Signals Probable Other 2025 Reduction, Says SocGen

BY MT Newswires | ECONOMIC | 06/18/25 07:26 AM EDT

07:26 AM EDT, 06/18/2025 (MT Newswires) -- The krona (SEK) languishes in G10 early Wednesday after Sweden's Riksbank cut rates by 25bp to 2.0% and signalled another reduction is probable this year, said Societe Generale.

The central bank says that weaker demand in the economy is expected to contribute to inflation being lower going forward than in the most recent forecast, noted SocGen.

The Riksbank lowered the gross domestic product growth forecast for this year by 0.7pp to 1.2%. Estimates for headline consumer price index were lowered by 0.3pp to 0.7% for this year and by 0.2pp to 1.6% for 2026 before returning to 2.1% in 2027.

The path for the policy rate was lowered by 0.2pp to 2.1% for 2025 and by 0.4pp to 1.9% for 2026 and 2027.

EUR/SEK faces short-term resistance near the May high of 11.02, wrote the bank in a note to clients. USD/SEK has consistently struggled to overcome the 50dma after fading below in February.

The 9.63/9.65 area is a "crucial" topside hurdle, support is located near 9.37/9.35, added SocGen.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.

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