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USD/SEK: Review and Forecast

Published on: 03/02/2017

As expected in the previous month the upward trend finally ended and now the rates of the USD/SEK pair are in the frames of a downtrend. This week the dollar was weakening against major currencies due to investors fearing the policy of Trump's administration. In addition, the U.S. Federal reserve left rates unchanged and signaled that interest rates won't be changed in March. The decrease of the USD stopped yesterday and the dollar strengthened thanks to positive statistics from the USA about an increase in jobs in the private sector, as well as data obtained about the growth of the business activity index. This allowed the dollar to regain its lost positions by the end of the week.

On the other hand, the Swedish economy demonstrates an enviable stability and has good perspectives for the near future. By the end of 2016 Sweden had the highest rates of return for households and the private business sector was at the peak of growth. The only remaining fear is the promotional activity of some social and political organizations for the introduction of a 6-hour working day, which can lead to a wave of reductions due to a high-costing labor force, and higher unemployment as a result. Still, right now things are going well for Sweden and the Swedish Krona (SEK) continues strengthening.

USD/SEK H4 chart

At the moment the MACD oscillator shows a signal to BUY against the trend. Such deals can be effective in short-term trading. In the middle- and the long-term trading the best solution is to open deals to sell as we can’t see any preconditions for a new trend reversal.

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