March 23, 2023

USD/SEK Prediction Amid Accelerated Swedish Krona Meltdown

Briefly –

  • USD/SEK saw its price jumping to ATHs on Thursday.
  • Sweden announced massive consumer inflation data.
  • The headline CPI (Consumer Price Index) climbed to 8.7%.

The USD/SEK price reacted to the massive Swedish consumer inflation with an upswing towards all-time highs. The pair hiked to 10.58 ATH after surging more than 16% in 2022. Meanwhile, the Swedish kroon lost approximately 25% over the last twelve months.

The U.S and Swedish Inflation Rising

The American BLS (Bureau of Labor Statistics) said (on Wednesday) that the nation’s consumer inflation climbed to 9.1% last month (June 2022). That presented the highest surge in more than four decades. Moreover, the BLS confirmed the cost of housing, food, and energy continued rising.

Also, other nations record surging inflation. Thursday’s data from the Swedish statistics agency revealed Sweden’s headline inflation increased from May’s 1.0% to June’s 1.2%. The uptick represented an 8.7% Y/Y gain, the highest figure over the last few decades.

More data suggested constant interest rates (consumer) inflation climbed to 8.5% from 7.2% on Y/Y. Meanwhile, this surge exceeded the 8.1% median estimate. Moreover, Sweden’s unemployment stayed unaltered at 6.6%.

Thus, analysts trust the Riksbank and the Fed Reserve will adopt a more hawkish stance. The Fed has already increased rates by 150bp within the last few months. Analysts expect the bank to raise rates by a massive 100bp.

Also, Riksbank has exhibited a hawkish stance. The central bank surprised market players with a 0.50% rate hike in June. Moreover, it highlighted similar or higher hikes during its September meeting. Other banks, including the Reserve Bank of New Zealand and BOC, have recently introduced massive rate hikes.

USD/SEK Prediction

According to the 24-hour chart, USD-SEK climbed to an ATH this week, hitting 10.70. That saw the price moving to the ascending channel’s upper side. Moreover, the pair climbed past the 25 and 50-day Moving Average as the RSI (Relative Strength Index) entered the overbought region. Thus, USD/SEK will likely maintain an upside as bulls aim at the crucial resistance at 11.0. However, a decline beneath the 10.40 support would annul the bullish narrative.

Stay tuned for the latest financial news.

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