USDSEK upside bias continues today after the Riksbank kept the interest rates unchanged at 0% as was expected by analysts. The monetary meeting added nothing new to what already known in the markets. The Swedish economy is recovering from the sharp drop during the coronavirus crisis but still is far away from the pre-coronavirus level. The Sweden central bank will continue its asset purchases up to 500 billion in all the programmes that launched during the crisis.
Riksbank expects the downside risks to persist, and therefore the monetary policy continues with current 0% rates until the third quarter of 2023. Current policy creating the conditions for a recovery helping inflation to rise at the 2% target. The central bank also reiterated that it would use all tools available to support the Swedish economy.
Riksbank Revised Higher it’s Economic Projections
Riksbank also revised higher its projections for the economy. Now expects the GDP contract by -3.6% from -4.5% in 2020 while it sees a 3.7% growth from 3.6% in 2021. The unemployment rate is expected at 8.6% from 8.7% in 2020, while CPI is forecasted at 0.6% in 2020 and 1.1% in 2021.
USDSEK Technical Analysis
USDSEK is 0.05% higher at 8.8433, while earlier in European session the pair hit the highest level since July 23. The pair yesterday jumped above the 50-day moving average as investors run for cover in the USD safe haven.
Short term is positive and will stay positive as long as the pair remains above the 50-day moving average. Resistance for the pair would be met at 8.9860 the high from July 21. A move above the 100-day moving average at 9.0968 would be a game-changer, and bulls would take control.
On the downside, immediate support for USDSEK stands at 8.8330 the daily low. The 50-day resistance has turned now into support at 8.7654. A break below 8,7654 would open the way for the recent lows at 8.5966 from September 1.
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USDSEK Daily Chart
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