USD/SEK wavers after weak US and Sweden inflation numbers
- The USD/SEK pair is wavering today as traders react to disappointing inflation data from Sweden and the US.
- Consumer prices in the United States rose by an annualised rate of 1.2% down from 1.4% in September.
- In Sweden, the CPI increased by 0.3% in October.
The USD/SEK price was little changed today as traders reacted to inflation data from the United States and Sweden. The pair is trading at 8.6300, which is slightly above this week’s low of 8.5570.
Sweden inflation drops
Consumer prices in Sweden dropped in October, according to the latest numbers by the country’s statistics office.
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The headline consumer price index data dropped by 0.1% on a month-on-month basis. That was in line with what analysts polled by Reuters was expecting. It was also lower than the previous month’s increase of 0.1%.
The CPI increased by 0.3% in October, a slight decline from the September’s increase of 0.4%. At the same time, the Consumer Price Index with fixed interest rate remained at 0.3% in October. According to the bureau, this performance was mostly because of electricity prices. The cost of electricity dropped by 4.9%.
Other items that affected consumer prices were fuel, telephone equipment, and packaged holidays that dropped by 10.2%, 9.8%, and 16.9%, respectively. These declines were offset by an increase in food and non-alcoholic beverages, housing, and furnishings and household goods.
These numbers came at a time when the number of Covid cases in Sweden has started to rise. On Tuesday, the country recorded more than 4,160 new cases. That was slightly below last Thursday’s increase of more than 4,766. Also, according to the Financial Times, hospitalisations have continued to surge.
That has pushed the government to impose partial lockdowns of bars and restaurants for the first time. Authorities have also urged people to stay at home when possible and avoid physical contact.
US inflation also low
The USD/SEK is also reacting to consumer prices from the United States. According to the statistics bureau, the headline consumer price index (CPI) in the country increased at an annualised rate of 1.2%. That was slightly lower than the previous month’s increase of 1.4%. On an MoM basis, the CPI increased by 0.0%. The core CPI, which excludes the volatile food and energy prices, rose by an annualised rate of 1.6%. These numbers are below the Fed target of 2.0%.
Separately, more than 709,000 Americans filed for jobless claims last week. This was the lowest the figure of initial claims has been since March this year when the country went to lockdown. The lagging continuing jobless claims data dropped from last week’s 7.28 million to 6.78 million.
USD/SEK technical outlook
On the daily chart, we see that the USD/SEK pair has been on a strong downward trend recently. Since March, it has dropped by more than 17%. Also, the current price is an important support since it was the lowest level in July, August, and September. It is also below the 25-day and 50-day simple moving averages. Therefore, at least for now, the pair will continue falling, especially when it manages to solidly move below this week’s low of 8.5570. Read our review of the best high leverage forex brokers here.