Recent developments in the European Central Bank (ECB) and the Swedish economy are shaping the euro (EUR), Swedish krona (SEK), and their exchange rate (EUR/SEK):
ECB's Hawkish Stance: Strong messaging from ECB hawks for tighter policy before the September meeting contrasts with market expectations below 50%. Despite explicit statements and a hawkish tone from President Christine Lagarde, market pricing remains stagnant.
Data Dependency and Inflation: The ECB's data-driven approach hinges on this week's inflation data. Predictions of slight core CPI inflation slowdown to 5.3% from 5.5% could trigger a 25 basis points rate hike in September. US payroll numbers also play a role.
Swedish Data: Better-than-expected GDP and retail sales data in Sweden show Q2 contraction of 0.8% (previously -1.5%) and 1.0% growth in July retail sales. The krona already reflects economic underperformance and real estate risks.
Upcoming in Sweden: Wage figures, economic survey, manufacturing data, and Riksbank's Anna Breman's inflation panel pose events to watch.
EUR/SEK Outlook: Core inflation support for an ECB hike could pressure EUR/SEK upward. But improved external conditions and strong Swedish data might ease EUR/SEK from recent highs.
On a technical front, MACD is supporting the bullish outlook, while RSI remains neutral at this point.
If the trend continues, the currency pair might test its resistance level at 12.0417. In the opposite scenario the pair might go down to 11.8065
Risk Disclosure: Trading Foreign Exchange (Forex) and Contracts of Difference (CFD's) carries a high level of risk. By registering and signing up, any client affirms their understanding of their own personal accountability for all transactions performed within their account and recognizes the risks associated with trading on such markets and on such sites. Furthermore, one understands that the company carries zero influence over transactions, markets, and trading signals, therefore, cannot be held liable nor guarantee any profits or losses.
ECB's Hawkish Stance: Strong messaging from ECB hawks for tighter policy before the September meeting contrasts with market expectations below 50%. Despite explicit statements and a hawkish tone from President Christine Lagarde, market pricing remains stagnant.
Data Dependency and Inflation: The ECB's data-driven approach hinges on this week's inflation data. Predictions of slight core CPI inflation slowdown to 5.3% from 5.5% could trigger a 25 basis points rate hike in September. US payroll numbers also play a role.
Swedish Data: Better-than-expected GDP and retail sales data in Sweden show Q2 contraction of 0.8% (previously -1.5%) and 1.0% growth in July retail sales. The krona already reflects economic underperformance and real estate risks.
Upcoming in Sweden: Wage figures, economic survey, manufacturing data, and Riksbank's Anna Breman's inflation panel pose events to watch.
EUR/SEK Outlook: Core inflation support for an ECB hike could pressure EUR/SEK upward. But improved external conditions and strong Swedish data might ease EUR/SEK from recent highs.
On a technical front, MACD is supporting the bullish outlook, while RSI remains neutral at this point.
If the trend continues, the currency pair might test its resistance level at 12.0417. In the opposite scenario the pair might go down to 11.8065
Risk Disclosure: Trading Foreign Exchange (Forex) and Contracts of Difference (CFD's) carries a high level of risk. By registering and signing up, any client affirms their understanding of their own personal accountability for all transactions performed within their account and recognizes the risks associated with trading on such markets and on such sites. Furthermore, one understands that the company carries zero influence over transactions, markets, and trading signals, therefore, cannot be held liable nor guarantee any profits or losses.