April 11, OctaFX – The Swedish Krona is depreciating to multi-day lows vs. its European peer in the second half of the week, lifting EURSEK to fresh tops in the 10.45 region.
EURSEK in 2-week highs despite positive CPI prints
The selling pressure around SEK is picking up the pace on Thursday despite higher-than-expected inflation figures in the Scandinavian economy during last month.
In fact, consumer prices rose at a monthly 0.2% and 1.9% from a year earlier. In addition, the CPIF (CPI at constant interest rates) increased 0.2% inter-month and 1.8% over the last twelve months.
Earlier in the week, Sweden’s Industrial New Orders contracted at an annualized 2.8% during February, extending the downside from January’s 0.5% contraction.
In the meantime, the cross is tracking the better tone in the single currency amidst favourable trends surrounding the risk-associated universe, advancing for the second week in a row following monthly lows in the 10.3700 region.
Moving forward, Riksbank’s Governor Ingves and Deputies Skingsley and Jansson will participate in the IMF Spring Meetings in Washington later today ahead of the speech by Deputy Governor M.Floden on ‘The economic situation and current monetary policy’ tomorrow.
What to look for around SEK
Fundamentals in the Nordic economy remain solid for the time being despite some deterioration in the domestic outlook and speculations that the Riksbank could stay ‘lower for longer’. However, the Scandinavian central bank did not rule out a rate hike by year-end (yet). SEK is also facing extra headwinds as market participants consider it a funding currency when comes to carry trade.
EURSEK technical outlook
As of writing the cross is up 0.08% at 10.4470 and faces the next hurdle at 10.4589 (high Apr.11) seconded by 10.4683 (55-day SMA) and then 10.5048 (high Mar.28). On the flip side, a break below 10.3779 (200-day SMA) would expose 10.3769 (low Apr.1) and then 10.3246 (61.8% Fibo of the December-March rally).
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