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
Wall Street
Bullish
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
More View more
Real Time News
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sIHrP https://t.co/eaA8ZI6DVu
  • Chinese property development company Sinic Holdings (2103) - Down 87%...@DailyFXTeam #contagion #Evergrande https://t.co/h5mfwqGASZ
  • 🇪🇸 Balance of Trade (JUL) Actual: €-1.60B Previous: €-0.98B https://www.dailyfx.com/economic-calendar#2021-09-20
  • Heads Up:🇪🇸 Balance of Trade (JUL) due at 08:00 GMT (15min) Previous: €-0.98B https://www.dailyfx.com/economic-calendar#2021-09-20
  • Fitch on China Property Developers - View will turn negative if sales in H2 21 fall below that achieved in H2 19 and/or if sharp fall follows through to H1 22 - Government policies in sector remain tight and show no sign of imminent loosening
  • Slippage can be a common occurrence in forex trading but is often misunderstood. Understanding how forex slippage occurs can enable a trader to minimize negative slippage, while potentially maximizing positive slippage. Learn about FX slippage here: https://t.co/Blrl0uF2Ct https://t.co/B0Y3XJhkRS
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here: https://t.co/8A1QhwMVKo https://t.co/1xhewkdV21
  • (USD Weekly Tech) US Dollar Dominant Uptrend Back In Focus: EUR/USD, USD/JPY, NZD/USD, USD/CHF https://www.dailyfx.com/forex/technical/article/special_report/2021/09/20/US-Dollar-Dominant-Uptrend-Back-In-Focus-EURUSD-USDJPY-NZDUSD-USDCHF.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/IpwzBGCi7P
  • What is your forex trading style? Take the quiz and find out: https://t.co/YY3ePTpzSI https://t.co/qv8keXFzHZ
  • Join @IlyaSpivak at 22:00 EST/2:00 GMT for his cross-market weekly outlook webinar. Register here: https://t.co/MKGHc9ae64 https://t.co/JMlT0Wn3DK
Euro and Krona at Risk Amid Sweden Political Gridlock

Euro and Krona at Risk Amid Sweden Political Gridlock

Dimitri Zabelin, Analyst

TALKING POINTS – Swedish Elections, Euro, krona

  • Swedish parliament might remain deadlocked for weeks or more
  • Nationalist Sweden Democrats complicate government formation
  • Euro, Krona may suffer as new administration hangs in balance

MAINSTREAM PARTIES FIZZLE IN SWEDISH ELECTIONS

Following the elections on September 9th, Sweden’s parliament – the Riksdag – experienced a historically unprecedented shake up. The Social Democrats, who for almost 70 years have ruled with an absolute majority – 175 seats or more out of 349 – garnered less than 50% of the vote.

At the same time, right-wing populist and nationalist Sweden Democrats (SD) delivered their best performance to date. They came in at an impressive 17.5%, though this scored below some expectations calling for a share of the vote as high as 25%. Their popularity is part of a broader rise of populists and nationalists across Europe. It has also been an important driver of regional currency price movements.

POST-ELECTION RIKSDAG COMPOSITION

The elections resulted in a hung parliament with the following top three parties:

  • Social Democrats - 100 seats (28.26%)
  • Moderate Party - 71 seats (19.84%)
  • Sweden Democrats - 62 seats (17.53%)

Within parliament are three blocs that dominate the political landscape:

  • Red-Greens (center-left) - 144 seats (40.68%)
  • The Alliance (center-right) - 143 seats (40.26%)
  • Sweden Democrats - 62 seats (17.53%)

EURO, KRONA VULNERABLE ON RISK OF GRIDLOCK

Following the elections, on September 25th, Swedish Social Democratic Party leader and Prime Minister Stefan Löfven was voted out. Before a new prime minister is selected, he will serve in the interim.

Newly elected speaker of the Riksdag, Andreas Norlen, is scheduled to begin talks with all parties today to decide whom he will propose as the new PM. He is forecasted to pick Opposition and Moderate party leader Ulf Kristersson, most likely due to their mutual party affiliation.

Both major party blocs have ruled out forming a coalition with the SDs. However, since no single party or bloc holds an outright majority, this puts the SDs in a strong bargaining position. The Social Democrats have ruled out backing an Alliance government and Kristersson has stated he will not work with them because of their roots in neo-Nazism.

The nationalist party has stated that they are ready to prevent the formation of any new government that excludes them from making policy, with a particular emphasis on immigration. The Riksdag has never rejected the proposal of a new Prime Minister. However, in a historically unprecedented moment, if parliament rejects four proposals, another round of elections will have to be held within three months.

Political gridlock is likely to continue for weeks or longer as parliament attempts to form a government. Compromise is hard to find in the current polarizedclimate. Tragically, that is precisely what is needed to form a new government and calm financial markets. The Swedish Krona and the Euro may become unusually volatile as a result, with the emergence of selling pressure a distinct possibility as the uncertain landscape inspires capital outflows.

FX TRADING RESOURCES

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

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

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

DISCLOSURES