News & Analysis at your fingertips.

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. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • Key break here in the 10-year #Treasury yield as it rises to the highest since late June Took out 1.4230 resistance, and the 100-day SMA Eyes now on the 38.2% Fib extension at 1.4775 Also potential falling resistance from March https://t.co/4cI6l210ui
  • The move in rates after this week’s FOMC has continued and the 10 year yield has pushed up to a fresh two-month-high. Get your market update from @JStanleyFX here:https://t.co/CRWhuZ3sxD https://t.co/svHHqN2Zz8
  • S&P 500 contending with its proverbial ‘line in the sand’ as bulls and bears battle for directional control. How we close/trade around the 50-day moving average could serve as a noteworthy bellwether for risk trends headed into next week. I remain cautious below ~4,480. $SPX $ES https://t.co/qogkjs1Sx2
  • USD/JPY trades to a fresh monthly (110.57) amid the pickup in longer-dated US Treasury yields, and the exchange rate may stage a larger advance over the coming days. Get your market update from @DavidJSong here:https://t.co/dlNXOrJnM9 https://t.co/LCQd26W1zF
  • US yields continue to climb, with the 10-year Treasury yield trading above 1.45% $ZN $ZB https://t.co/N4EDfwD3nZ
  • $USDJPY bull thesis appears quite constructive. Technicals show topside breakout above trend resistance following a period of consolidation. Bond yields providing the fundamental catalyst. Eyes on Aug/YTD highs. A broad-based deterioration in market sentiment poses downside risk. https://t.co/AazskXGjHq
  • WTI posting another session of strong gains, currently flirting with the 74 handle $CL #Oil #OOTT https://t.co/oYnm2OYRky
  • The New Zealand Dollar’s bullish breakout attempt in early-September was rebuffed. Price action at the end of the month is telling a different story. Get your market update from @CVecchioFX here:https://t.co/AquMSrssne https://t.co/DtFuFfrS7Q
  • So much for that Evergrande recovery. Shares of the troubled Chinese property developer are down approximately -12% today following yesterday's impressive rally (biggest in a year) https://t.co/Nome25d9Bt
  • Retail trading platform Robinhood announces hire of new Chief Compliance Officer amid regulatory scrutiny
Krona Drops Post-Riksbank, But Looks Set to Maintain Strength

Krona Drops Post-Riksbank, But Looks Set to Maintain Strength

Oliver Morrison, Analyst

Talking Points:

- Riksbank keeps rates on hold as expected at -0.5%.

- But the central bank dissapoints Krona bullswith an unexpectedly dovish view on interest rates.

-EURSEK and USDSEK spike, but don’t hold gains, suggesting SEK trend will stay strong.

- See the DailyFX Economic Calendar and see what live coverage for key event risk impacting FX markets is scheduled for the week on the DailyFX Webinar Calendar.

Sweden’s Krona fell against the Euro and the Dollar after the country’s central bank, the Riksbank, kept rates on hold at -0.5% at its February policy meeting and left intact a government bond-buying program set to continue until June.

The decision to hold pat was expected, but the bank maintained a very dovish tone, stressing the chances of further rate cuts despite the strength of the Swedish economy, which took markets by surprise and put the currency under selling pressure.

The bank’s December meeting gave Krona bulls some hope that the Riksbank might climb down from its ultra-accommodative policy stance. At that meeting, the Riksbank extended its asset purchase programme and said that it will buy additional SEK 30 billion in bonds by mid-2017. But the minutes published in January revealed that three of six board members spoke out against giving an outlook that signalled another rate cut, and that Governor Stefan Ingves was forced to use his decisive vote to push through an extension of asset purchases.

But the bank maintained a very dovish tone today again in its February policy meeting, repeating a threat to intervene in FX markets should a strong krona, which has strengthened more than forecast since the December meeting, jeopardize efforts to reach its inflation target.

“The krona exchange rate continues to create uncertainty about the development in inflation,” the central bank said. “Since December, the krona has been clearly stronger than expected. This rapid appreciation is not expected to continue, however.”

It said there “is still a greater probability that the rate will be cut than that it will be raised in the near term” and said it sees “slow increases” in rates that “will not begin until the start of 2018.” It added: “For inflation to stabilise around 2%, a continued strong level of economic activity and a krona that does not appreciate too rapidly are required. Monetary policy therefore still needs to remain expansionary.”

EURSEK and USDSEK both quickly spiked on the news, although they soon retreated from the highs, indicating that the overall trend of an appreciating SEK isn’t set to change. EURSEK currently trades at 9.4528, a small rise of 0.0046 on the day. USDSEK trades at 8.9511, a rise of 0.0183 on the day.

EURSEK 15-Minute Chart (February 15, Intraday)

Krona Drops Post-Riksbank, But Looks Set to Maintain Strength

--- Written by Oliver Morrison, Analyst

To contact Oliver, email him at oliver.morrison@ig.com

Don't trade FX but want to learn more? Read the DailyFX Trading Guides

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

DISCLOSURES