Swedish krona strengthens as Riksbank adopts cautious policy; Norwegian krone stable before rate decision

Investing.com -- The Swedish krona has seen a slight increase following a decision by the Riksbank, Sweden's central bank, to cut its key interest rate by 25 basis points to 2.5%. This move was anticipated, but the Riksbank also indicated a careful attitude towards future policy easing.

The bank stated that rates have been lowered quickly and that monetary policy impacts the economy gradually, justifying a "more tentative approach" in the future.

The Riksbank will closely scrutinize the necessity for future reductions, considering the effects of previous cuts and the prognosis for inflation and economic growth. It is predicted that the bank will implement another rate cut during the first half of 2025.

As a result of this decision, the EUR/SEK dropped 0.2% to 11.5002, from 11.5098 prior to the announcement.

Meanwhile, the Norwegian krone remained steady as the Norges Bank prepared to make its policy decision. A rate cut could be on the horizon in the first quarter, although this is becoming a tighter call. The EUR/NOK remained stable, trading flat at 11.7938.

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Source: Investing.com