We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Mixed
GBP/USD
Bullish
USD/JPY
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
Oil - US Crude
Mixed
Bitcoin
Bearish
More View more
Real Time News
  • As we head into next week, Cable is continuing to digest the massive leg higher last month, which at some point soon could mean another surge. Get your $GBPUSD technical analysis from @PaulRobinsonFX here: https://t.co/LJ42YhDe3X https://t.co/5hGwhGBpLB
  • Asia’s vast and growing importance to the world economy is not yet matched by the presence of a currency trading center to rival the established order. Get your update on market drivers in Asia from @DavidCottleFX here: https://t.co/E2hqoRdO7q https://t.co/urMnUCq4fn
  • RT @markets: White-hot pot stocks have flamed out in spectacular fashion https://t.co/3GsVsRyZaZ
  • What is the best time to trade #forex? Find out: https://t.co/M9R46r5ewa #tradingstyle https://t.co/gJ1QDrox67
  • #Gold prices may be given a tailwind from the FOMC minutes and escalating trade war risks if they fuel demand for anti-fiat assets amid expectations of additional Fed easing. Get your $XAUUSD market update from @ZabelinDimitri here: https://t.co/OJ7WUY9W7E $gld https://t.co/kBp3opzptm
  • Why should you set trading goals? How can it help regardless of what your #tradingstyle is? Find out: https://t.co/AYdD7ODlv1 https://t.co/G0ftVurNNN
  • Manning the penalty box today...i hope there aren't too many visitors https://t.co/1y81Li7laL
  • Do you think your #tradingstyle is of a #FOMO trader? Find out how you can turn that to #JOMO? Find out: https://t.co/79Q4pYdVEd https://t.co/S82AOd5AeP
  • What are the truths and lies of #forex trading regardless of your #tradingstyle here: https://t.co/uF75VPzstr https://t.co/xJ808KvLxr
  • RT @PaulMDomenick: “But Paul, I don’t have a mentor!! Really? •Do you have YouTube? You have a mentor! •Do you have a bookstore? You hav…
Outlook for SEK, Riksbank Monetary Policy, Sweden's Economy

Outlook for SEK, Riksbank Monetary Policy, Sweden's Economy

2019-02-15 03:30:00
Dimitri Zabelin, Junior Currency Analyst
Share:

SEK TALKING POINTS – USD/SEK, SWEDISH KRONA, RIKSBANK, SWEDEN ECONOMY

  • Riksbank governor has unexpected optimism – markets shrug
  • Sweden economy still vulnerable to domestic, international risk
  • Will USD/SEK continue to trade above 9.2002 for all of 2019?

See our free guide to learn how to use economic news in your trading strategy!

At the most recent policy meeting, Riksbank Governor Stefan Ingves gave off an unexpectedly upbeat tone and – relatively – hawkish outlook on policy going forward. The central bank kept the benchmark rate at -0.25 percent but reiterated that they are still looking to raise rates at least once in the latter half of the year.

It is the economic outlook and inflation prospects that will determine future monetary policy’ Ingves said. Looking past his comments on the Swedish economy’s strength and global developments now being in a ‘calmer phase’ the majority of the Riksbank board members don’t seem to share this same sentiment. One needn’t look further than the December policy meeting minutes to see other policymakers’ concerns.

Domestic risks from high household indebtedness combined with international risks from Brexit and the US-China trade war are still matters of concern. Markets appear to be betting that the Riksbank’s policy will be blown away by these headwinds and will compel the central bank to adjust its policy to a more dovish approach.

Chart Showing OMX Equity Index

Despite SEK – measured here as a weighted index against a basket of other currencies – dropping along with Sweden’s economic performance, the country’s benchmark OMX equity index has continued to climb. This seems to complement the theory that investors are expecting for the central bank to implement a policy conducive for countering a slowdown in the business cycle via looser credit conditions.

Chart Showing Sweden Citi Economic Surprise Index

The potential turmoil in Europe may also play a bigger role in weighing on the Swedish economy. For the time being, markets appear to be kicking the proverbial can down the road and ignoring that the three largest Eurozone economies are slowing down faster than forecasts had suggested. The potential impact it may have on Sweden’s economy has to do with the unique political economy of EU-Nordic relations.

USD/SEK in this environment may rise as investors pivot away from chasing yields to preserving capital. The pair have skyrocketed through several resistance levels and are now trading above a key support at 9.2027. As of February 11, USD/SEK reached its highest point since December 2016. However, the pair in the coming days may cool down as it exits what appears to be overbought territory in the RSI indicator.

USD/SEK – Daily Chart

Chart Showing USD/SEK

Within the coming months the pair may aim for 9.4066 with potentially minor resistance levels along the way. The broader fundamental outlook for global politics and the economy suggests investors may feel more skittish on the export-driven Krona and might instead flock to the US Dollar and Japanese Yen as risk appetite sours.

USD/SEK TRADING RESOURCES

--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.