- USD/SEK increased to 11.247, seeing a 1% gains and then retreated to 11.152.
- The Riksbank hiked to 4%, leaving the door open for further hikes.
- US yields continue to rise, benefiting the USD.
On Thursday’s session, the USD/SEK climbed to its highest level since October 2022, towards 11.247, seeing 1% daily gains, but failed to hold its momentum and settled at 11.152. On the SEK's side, the Swedish Riksbank hiked rates by 25 bps and sounded hawkish, while on the USD side, the Greenback eased during the American session, and seems to be consolidating gains.
Investors assess Riksbank and Fed decisions
The Swedish Riksbank announced on Thursday that it would hike rates from 3.75% to 4% as widely anticipated. In the policy statement, the bank commented that progress was being made, but inflation remained too high, noting that further hikes may be necessary. In the meantime, markets are discounting that the Riksbank will deliver one final hike in November to end the tightening cycle, mainly due to concerns over the health of the Swedish economy, amongst the worst performers in Europe.
On the US side, the Federal Reserve (Fed) held rates steady on Wednesday. Still, their Summary of Economic Projections (SEP) revealed that the median rate forecast of the Federal Open Market Committee (FOMC) members stood at 5.6% for 2023, meaning that one more hike in on the table. In addition, the rate projections 2024 were revised to 5.1% and virtually delayed rate cuts. These hawkish projections boosted the US yields, which trade in multi-year highs as investors are bracing for one more hike by the Fed and rates being higher for longer. The 10-year bond yield reached 4.47% while the two and 5-year yield rose to 5.14% and 4.61%, respectively. That being said, the DXY index found support at a high near 105.70 and eased to 105.30 but the expectations of a more aggressive Fed will likely limit its losses.
USD/SEK Levels to watch
The USD/SEK daily chart signals a bullish sentiment for the short term. The Relative Strength Index (RSI) is favourably positioned in positive territory above its midline, reflecting an upward movement. Similarly, Moving Average Convergence Divergence (MACD) depicts green bars, affirming the bullish momentum. In addition, the pair is above the 20,100,200-day Simple Moving Average (SMA), implying that the bulls retain control on a broader scale.
Support levels: 11.150, 11.070 (20-day SMA), 11.000.
Resistance levels: 11.289, 11.300, 11.406.
USD/SEK Daily Chart
-638309194362788292.png)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds above 1.0750 to start the week
EUR/USD trades in positive territory above 1.0750 in the European session on Monday. The US Dollar struggles to find demand following Friday's disappointing labor market data and helps the pair hold its ground.
GBP/USD edges higher toward 1.2600
Following Friday's volatile action, GBP/USD pushes higher toward 1.2600 on Monday. Soft April jobs report from the US and the modest improvement seen in risk mood make it difficult for the US Dollar to gather strength.
Gold rebounds above $2,310 after downbeat NFP data, eyes on Fedspeak
Gold price trades in positive territory above $2,310 after closing the previous week in the red. The weaker-than-expected US employment data have boosted the odds of a September Fed rate cut, hurting the USD and helping XAU/USD find support.
Addressing the crypto investor dilemma: To invest or not? Premium
Bitcoin price trades around $63,000 with no directional bias. The consolidation has pushed crypto investors into a state of uncertainty. Investors can expect a bullish directional bias above $70,000 and a bearish one below $50,000.
Week ahead: BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.