EUR/SEK drops to six-week lows following the Riksbank rate cut
- The Swedish Krona strengthened further vs. EUR, and USD.
- The Riksbank reduced its policy rate by 25 bps, as anticipated.
- The Riksbank left the door open to further interest rate cuts.
The Swedish Krona (SEK) gathers extra pace and drags EUR/SEK to new multi-week lows near 11.3600 on Tuesday.
The Riksbank said more rate cuts are coming
In fact, EUR/SEK drops for the third day in a row, breaking the key 200-day SMA, after the Riksbank trimmed its policy rate by 25 bps to 3.50% at its meeting earlier on Tuesday, matching the broad consensus.
The bank also suggested that it might accelerate policy easing if price pressures do not intensify. Indeed, the Riksbank noted that if the inflation outlook remains unchanged, the policy rate could be reduced two or three more times this year, which would be somewhat faster than the Executive Board's assessment in June.
EUR/SEK important levels
At the moment, EUR/SEK retreats by 0.41% to 11.3803. The loss of. The August low of 11.3655 (August 20) could pave the way for a potential test of the July low of 11.3055 (July 3) ahead of the June bottom of 11.1420 (June 11). On the upside, initial resistance emerges at the weekly top of 11.5726 (August 15), prior to the 2024 peak of 11.7782 (July 25) and the November 2023 high of 11.8416 (November 2).
Author
Pablo Piovano
FXStreet
Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.
