- The USD/SEK pair declined after strong retail sales and confidence data from Sweden.
- According to the statistics office, retail sales rose by 4.8% in July after rising by 2.9% in June.
- Consumer confidence rose to 84.4 while the economic tendency indicator jumped to 87.0
The USD/SEK pair declined slightly as investors reacted to relatively strong confidence and retail sales data from Sweden. The pair is trading at 8.7098, which is lower than the intraday high of 8.7360.
Sweden consumer confidence rises
Business and consumer confidence in Sweden continued rising in August, according to the latest data by the National Institute of Economic Research (NIER). The consumer confidence rose to 84.4 in August from the previous 83.3. In the same month confidence among manufacturers increased to 97.7 from the previous 95.7. According to the report:
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“Consumer confidence improved somewhat in August but is still much weaker than normal. The change was due primarily to consumers being less pessimistic about the Swedish economy in the coming year and to their view of their own finances having normalised.”
At the same time, the Economic Tendency Indicator rose for the fourth straight month to 87.0. According to NIER, this growth was mostly because of companies in the services sector, which increased by 6.3 points to 79.6. Confidence in the retail sector increased to 98.3, as the country continues to reopen.
Sweden retail sales jump
The USD/SEK reacted mildly to the strong retail sales numbers from Sweden. According to the bureau of statistics, retail sales jumped by 4.8% in July compared to the same month in 2019. This increase was better than the 1.2% growth recorded in the United States in July. The sales were also better than the EU’s increase of 1.3%.
Retail sales in durables increased by 7.0% while consumables were unchanged. The consumables figure excludes Systembolaget, which is a liquor store brand owned by the government.
According to the bureau, turnover in retail trade measured by current prices rose by 6.6% on a year-on-year basis in July. Durables and consumables increased by 8.8% and 2.0%, respectively.
The USD/SEK is also reacting to the Swedish trade numbers. According to the bureau, Sweden exported goods worth more than 103.8 billion SEK and imported goods worth 100.9 billion SEK. That led to a trade surplus of about 2.9 billion SEK. Most of this trade was among non-EU countries, which resulted to a surplus of more than 16.8 billion SEK. Sweden had a 13.9 billion SEK deficit among EU members.
USD/SEK technical outlook
The USD/SEK pair is trading at 8.7098, which is substantially lower than this year’s high of 10.4845. On the daily chart, the price seems to have found a lot of resistance as shown by the green rectangle pattern. It is also below the 50-day and 100-day exponential moving averages. The Average True Range, which is an important measure of volatility, has declined to the lowest level since March 2. Therefore, the outlook for the USD/SEK is neutral, with the key support and resistance levels to watch being 8.600 and 8.8145.