US Dollar to Swedish Krona (USD/SEK) Exchange Rate Rallies to 4-Year High on US Data
Despite posting some relatively positive economic data results on Friday the Swedish Krona has declined against the majority of its most traded currency competitors. This is as a result of a new government from the recent election, and unknowns about any major changes to economic policy. Meanwhile, the US Dollar has clawed back the losses from trader over-purchasing after Friday’s labour market data was far more impressive than originally anticipated.
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The US Dollar to Swedish Krona exchange rate is currently trending in the region of 7.2829.
Thursday’s US domestic data publications printed relatively positively; with particular reference to labour market data. However, despite the fall in continuing and jobless claims the US Dollar was held back. This was because investors feared that the recent bullish run had not been warranted by ecostats, but rather was a result of over-purchase amid speculations of a rate hike increase in 2015.
In general the Swedish Krona has trended lower since the recent general election as traders avoided the risk of dramatically altered economic policies. The Krona did appreciate a little from a combination of improved manufacturing output and a softer US Dollar.
The US Dollar to Swedish Krona exchange rate has hit a low today of 6.0016.
Friday has seen the US Dollar appreciate across the board as it one again takes up the mantle of world-beater. Change in Non-farm Payrolls was forecast to rise from 180,000 to 215, 000 but the actual result showed a healthy jump to 248, 000. A surge in new Non-farm Payrolls suggests rising employment and potential inflation pressures, which the Federal Reserve often counters with rate increases. Also the Unemployment Rate showed a positive declination beyond the median market forecast of a continuation of the previous figure of 6.1%, with the actual result falling to 5.9%.
Swedish data was also positive on Friday. Yearly industrial production increased from -5.2% to -2.4%. Also the Services PMI improved upon the previous figure of 54.2 with a rise to 55.6. However, this positive data hasn’t been enough to overshadow trader fears of the unknown as a new government settles into office. The new Prime Minister Stefan Lofven has appointed a new cabinet on Friday, and wishes to hail the first ‘feminist government’. ‘Sweden is in a serious situation. Unemployment has become entrenched at high levels. School results are plunging and public welfare is showing major flaws,’ Lofven said in an address to parliament. ‘Now is the time for joining forces and taking joint responsibility’.
Forecast for the US Dollar to Swedish Krona Exchange Rate
With nothing more in terms of economic data on Friday it is likely that the USD/SEK exchange rate will continue to trend higher over the course of the weekend. Fresh speculation of the possibility that the Federal Reserve will normalise monetary policy is likely to cause increased demand for the ‘Greenback’. However traders won’t wish to make the same mistakes and take the American currency beyond its deserving level.