USD/SEK FALLS TO MULTI-MONTH LOWS AS SOFT CPI DATA AND DOVISH BETS ON THE FED WEIGHT
- The USD/SEK plunged towards 10.590, seeing 2.3% losses and hitting it lowest point since August.
- Swedish and US CPI readings from October came in lower than expected.
- Dovish bets on the Fed are pushing the pair downwards.
The USD/SEK dived vertically on Tuesday's session, falling to 10.590, tallying 2.3% daily losses. This was mainly driven by the USD weakening after the report of soft inflation figures for October, which was cheered by financial markets as their are now betting on the Federal Reserve (Fed) not hiking in December.
During October, the US Consumer Price Index (CPI) failed to meet expectations, exhibiting a decrease in the annual rate from 3.7% to 3.2%. This figure fell below the consensus forecast of 3.3%. Additionally, the Core CPI experienced a 0.2% increase in October, dropping the annual rate to 4%. These statistics further solidify the prevailing belief that the Federal Reserve is unlikely to proceed with further interest rate increases and cut rates sooner rather than later.
On Wednesday, the US will report Producer Price Index (PPI) and Retail Sales data from October, which could further reinforce the dovish narrative.
On the Swedish side, its CPI declined to 6.5% YoY but failed to trigger a reaction on the pair during the European session
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