The currency markets were fairly flat last week with traders unwinding the positions towards the end of the year.

Among the major news events last week, the U.S. Congress finally approved President Trump’s tax reforms bill. The USD was muted to the news.

In the Eurozone, Spain was once again back in the news as the fresh elections called by Spanish Prime Minister Rajoy saw the pro-independence parties winning a majority quite narrowly.

The sentiment in the euro was briefly hit before the currency managed to recover by Friday’s close.

Sweden’s Riksbank holds interest rates steady

The Swedish Riksbank held its monetary policy unchanged at its meeting last week.

The central bank held the negative interest rates steady and said that it would continue to reinvest the bonds that mature in 2019 from January onwards.

The central bank’s decision was widely expected by the markets.

The monetary policy board voted to keep the repo rate unchanged at -0.50% and signaled that interest rates will slowly start to rise by the middle of 2018.

The central bank had previously indicated that rates will slowly start to rise from next year.

However, central bank officials maintained that the current monetary policy will remain in an expansionary mode until inflation moves closer to the central bank’s target rate.

In its monetary policy statement, the Riksbank said that the net purchases of the government bonds will amount to about 290 billion SEK at the end of this year.

It said that the redemptions and coupon payments from the government bonds will be reinvested for the near term future.

This is expected to increase the Riksbank’s holdings in government bonds until end of 2018 and into early 2019.