Swedish Krona holds strong; Euro rangebound

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Swedish Krona holds strong; Euro rangebound
Credit: © Reuters.

Investing.com -- On Monday, the Swedish krona showcased strength against the euro, maintaining stability as Riksbank Governor Erik Thedeen dismissed the possibility of a rate cut in June. This announcement bolstered the currency, with the EUR/SEK exchange rate standing at 11.61, reflecting positively on 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 emphasized the risks associated with a weaker krona. His recent comments have diminished market expectations of a rate cut to 30%, suggesting that the Riksbank's previous rate cut is yielding 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 June rate cut, the krona could align more closely with the Norwegian krone, despite potential domestic economic challenges.

Meanwhile, the euro remains in a tight trading range against the US dollar. Factors contributing to this include a recovery in the dollar influenced by 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 EUR/USD pair is not expected to experience significant movement today due to a light data calendar in both the eurozone and the United States. Additionally, a speech by European Central Bank President Christine Lagarde at an event honoring Janet Yellen is not anticipated to address monetary policy, which could further contribute to the euro's static trading pattern for the day.

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