- USD/SEK records more than 1% gains rising above the 20-day SMA around 11.025.
- The USD is getting traction amid risk-off flows.
- The Fed Beige Book report didn’t report any relevant insights on the US economic activity.
- Despite rising inflation, markets discount low odds of further hikes by Riksbank.
On Wednesday, the USD/SEK rose above the 20-day Simple Moving Average (SMA) for the first time since September 25, driven by a broad-based US Dollar strength. Rising hawkish bets on the Federal Reserve (Fed) and negative market sentiment are the main drivers of the green currency’s strength.
Recent economic activity figures revealed that the US economy is holding strong despite the Federal Reserve's (Fed) contractionary monetary policy, and as the bank stated that is stance is data-dependant, the odds of a 25 hike in the December meeting rose to nearly 40% after strong Retail Sales and Industrial Production figures revealed on Tuesday. Those hawkish bets could also explain the increase in US Treasury bond yields, which increased to multi-week highs and also contributed to the upward movements of the USD.
On Wednesday, the Fed’s Beige book report on the US economic activity revealed no significant changes in the outlook since the September report and described the economy as “stable”.
On the SEK’s side, the Swedish Consumer Price Index (CPI) rose to 6.5% YoY, higher than the expected 6.3% but lower than the previous 7.5% reading. As for now, markets are expecting that the Riksbank won’t hike again in 2023 after September’s increase and analysts from Commerzbank Research stated that there is no upside for the SEK for the rest of the year as the Swedish bank is not acting decisively enough to combat inflation.
USD/SEK Levels to watch
Analysing the daily chart, USD/SEK exhibits signs of bulls recovering momentum. The Relative Strength Index (RSI) jumped above 50, while the Moving Average Convergence (MACD) presents decreasing red bars. Plus, the pair is now above the 20,100 and 200-day Simple Moving Averages (SMA), indicating that on the broader scale, the bulls are in command.
Support levels: 10.993 (20-day SMA),10.900,10.808 (100-day SMA).
Resistance levels: 11.055,11.105, 11.158.
USD/SEK Daily Chart
-638332542433182946.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
AUD/USD stalls ahead of Reserve Bank of Australia’s decision
The Australian Dollar registered minuscule gains compared to the US Dollar as traders braced for the Reserve Bank of Australia monetary policy meeting. A scarce economic docket in the United States and a bank holiday in the UK were the main drivers behind the “anemic” AUD/USD price action. The pair trades around 0.6624.
EUR/USD propped up near 1.0750 ahead of European Retail Sales
EUR/USD churned around 1.0770 to kick off the new trading week, with the pair rising after better-than-expected Purchasing Managers Index figures early Monday before settling into familiar chart territory above 1.0750 ahead of Tuesday’s pan-European Retail Sales figures.
Gold rises as US job slowdown dampens Treasury yields
Gold price rallied close to 1% on Monday, late in the North American session, bolstered by an improvement in risk appetite due to increased bets that the US Federal Reserve might begin to ease policy sooner than foreseen. The XAU/USD trades at around $2,320 after bouncing off daily lows of $2,291.
Ethereum traders show uncertainty following huge whale sale, Robinhood Crypto Wells notice
Ethereum holdings on centralized exchanges continue to decline despite recent whale sales. With Robinhood Crypto as the latest recipient of the SEC's Wells notice, Ethereum spot ETFs look more unlikely.
RBA expected to leave key interest rate on hold as inflation lingers
Interest rate in Australia will likely stay unchanged at 4.35%. Reserve Bank of Australia Governor Michele Bullock to keep her options open. Australian Dollar bullish case to be supported by a hawkish RBA.