Investing.com — On Monday, the Swedish krona showed strength against the euro and maintained stability as Riksbank Governor Erik Thedeen dismissed the possibility of a rate cut in June. This announcement strengthened the currency, with the exchange rate at 11.61, positively reflecting the Swedish central bank’s decision not to ease monetary policy following lower-than-expected inflation figures in April.
Thedeen, known for his cautious stance on monetary policy, has highlighted the risks associated with a weaker krona. His recent comments have reduced market expectations of a rate cut to 30%, suggesting that the Riksbank’s earlier rate cut is having the desired effect amid lower USD rates and improved risk sentiment. This has led to speculation that if the Riksbank continues to communicate against a rate cut in June, the krona could move closer to the Norwegian krone despite potential domestic economic problems.
Meanwhile, the euro remains within a tight trading range against the US dollar. Contributing factors include a recovery in the dollar, influenced by the weaker performance of the Australian dollar, New Zealand dollar and Japanese yen, while the euro, Canadian dollar and Norwegian krone have remained relatively stable.
The pair is not expected to see any significant movement today due to the weak data calendar in both the Eurozone and the United States. Moreover, a speech by European Central Bank President Christine Lagarde at an event honoring Janet Yellen is not expected to discuss monetary policy, which could further contribute to the euro’s static trading pattern on the day.
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