The USDSEK comes into focus on Thursday as Swedish 3rd quarter GDP is set for release on Thursday, November 5. Sweden’s economy is expected to have recovered sharply in Q3 2020 after falling 8.3% in the 2nd quarter, in what was the steepest contraction in 39 years.
According to a Nordea Bank research forecast, the 3rd quarter GDP is expected to have grown by 5%. The same research report notes that a large section of the economy appears to have normalized in the 3rd quarter. However, sectors directly affected by the coronavirus pandemic such as the hospitality and travel industry (airlines, tours, events, hotels, etc.) are excluded from such growth and pose a drag that has slowed recovery.
Exports make up 35% of Sweden’s Gross Domestic Product. Exports rebounded to pre-pandemic levels in August and September, allowing for a rebound of this industry that has driven the recovery in the Swedish economy, as per market expectation. Household consumption and imports have also posted some level of recovery, as did demand for labour.
Technical Playbook for Swedish GDP Data
If the GDP comes out better than expected, this would potentially be a SEK-positive situation. We could then see the USDSEK target downside targets at 8.79182, or even 8.69792 and 8.59761.
On the flip side, a recovery which is far short of expectation or a number which continues to remain in the negative territory would be a market disappointment. This may allow for an upside push on the USDSEK towards 8.98560. 9.03806 and 9.13309 are additional targets for buyers to the north.
However, the greenback may still be suffering a hangover from the US election, and this may alter whatever outcomes would ordinarily have been seen by the pair in response to the GDP data.
USDSEK Daily Chart