EUR/SEK to Gain on Riksdag Gridlock - Political Risk Rising
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TALKING POINTS – EUR/SEK, SWEDEN, ANNIE LOOF, STEFAN LOFVEN
- Annie Loof of the Center Party failed in her bid to form a government
- Stefan Lofen will be formally proposed as Prime Minister on Dec. 3rd
- EUR/SEK to rise as gridlock continues and poses a threat to stability
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CENTER PARTY’S LOOF UNABLE TO FORM GOVERNMENT
Annie Loof of the Center Party reported on Thursday that she was unable to form a government coalition. Stefan Lovfen of the Social Democrats Party will now be formally proposed as Prime Minister on December 3rd, giving him 10 days to gather sufficient support. The outlook for the recently-ousted PM does not look promising.
LOFVEN TAPPED FOR SECOND FORMAL ATTEMPT AT COALITION
Lofven will be the second candidate who will be formally proposed as PM. The first was Ulf Kristersson of the Moderates, who saw two rivals within the Alliance party bloc vote against him. If Lofven fails and two more candidates are rejected as PM thereafter, this will trigger a fresh election. That may fuel growing support for the nationalist Sweden Democrats.
EUR/SEK TECHINICAL OUTLOOK
EUR/SEK has been on a steady decline since its peak at 10.7276 in late August. The October support at 10.2858 is a noteworthy barrier despite the false breakout in early November that saw the pair test the hurdle at 10.2116. If the latter is broken on a daily closing basis, a move to challenge June’s low at 10.0963 may be next.
EUR/SEK TRADING RESOURCES
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--- 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.