**USD/SEK Settles Below 11, 2-Week High; Posts Weekly Gain**
*Original article by TradingPedia Analysis Team*
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The US Dollar to Swedish Krona currency pair (USD/SEK) drew considerable attention in the first week of August 2025, as it returned below the psychologically important 11.00 handle. After notching a two-week high on the back of robust US data and rising Treasury yields, the pair still posted a solid gain for the week, surpassing the Swedish Krona as the week’s outperformer among Scandinavian currencies.
This article explores the recent movement in USD/SEK, delves into the driving factors behind its advance, examines the technical setup, and discusses possible trajectories for the pair in the coming weeks.
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## USD/SEK: Key Highlights for the Week
– **USD/SEK climbed to a 2-week high near 11.05 before paring gains and settling moderately below 11.00**
– **Still managed a weekly increase, buoyed by US Dollar strength and relatively soft Swedish macroeconomic data**
– **Investors are eyeing both the Federal Reserve and Riksbank policy outlook, with diverging economic fundamentals**
– **Technical indicators signal the pair remains in a medium-term consolidation phase**
– **Near-term risk skewed towards further Dollar gains if Swedish inflation continues to underperform expectations**
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## US Dollar Regains Bid: Macro Drivers in Focus
The recent upswing in the USD/SEK exchange rate came as risk sentiment soured globally and US economic prints stayed stronger than forecast. The Greenback found persistent demand, bolstered by upward pressure on the US Treasury yields and markets beginning to doubt the timeline for Fed rate cuts.
– **US labor market resilience:** Recent nonfarm payrolls releases beat consensus, underscoring the labor market’s underlying strength. This has caused investors to downscale their expectations for aggressive Federal Reserve easing in the near term.
– **Stubborn US inflation:** Latest US inflation figures have hovered above the Fed’s two percent target, supporting the Federal Reserve’s patient approach. This, in turn, has lent support to the Dollar across G10 currencies.
– **Comparative economic activity:** The US economy continues to sharply outperform much of Europe, including Scandinavia, deepening fundamental divergence that has boosted the Greenback’s attractiveness as a yield and safety vehicle.
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## Headwinds for Swedish Krona: Local and Regional Factors
While the US Dollar benefited from resilient macroeconomic prints, the Swedish Krona faced headwinds locally:
– **Soft inflation trends:** Sweden’s latest CPI and underlying inflation metrics have continued to track below the Riksbank’s expectations. Disinflation has become persistent, raising speculation about earlier or deeper Swedish rate cuts.
– **Muted growth prospects:** Sweden’s GDP figures show the country’s growth to be one of the most anemic among developed economies. Consumer confidence and business sentiment remain subdued, limiting any organic bid for the Krona.
– **Riksbank policy ambiguity:** While the Riksbank has signaled readiness to ease monetary policy if inflation undershoots, it is also aware of the risk of triggering sharp Krona depreciation. This balancing act has supported uncertainty and volatility in the currency.
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### Swedish Macro Calendar: Recent Highlights
– June CPI at 2.2 percent YoY, below Riksbank’s target
– Underlying inflation excluding energy steady at 2.1 percent
– Unemployment edged higher to 8.7 percent
– GDP growth flat, with revised Q1 figures showing stagnation
– Consumer confidence and retail sales surveys emphasized caution among households
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## Technical Picture: USD/SEK Consolidates but Momentum Bias Favors Bulls
A medium-term look at the USD/SEK charts reveals a pattern of consolidation between 10.60 and 11.10, with recurrent attempts to break above the upper end of the range on pronounced Dollar rallies.
Read more on GBP/USD trading.