The USD is losing its position. The upward trend has lost its intensity, so the deals to sell seem the most effective.
The upward trend formed in January 2018 finally lost its intensity two months ago due to the weakening of the USD. Supported by strong macroeconomic statistics and an aggressive FED monetary policy, the US currency has lost most of the incentives for growth. At the same time, there is a difficult situation on the market, where none of the currencies can find enough stimulus factors due to various negative economic and political processes.
This week investors continue to receive economic reports for the past year. At the end of 2018 there was a significant decrease in economic growth in the EU, a slowdown in inflation, and a decline in the manufacturing output of the leading EU countries. This does not allow the ECB to optimize its monetary policy and complete the economic stimulus program, although a year earlier such plans were announced. In Sweden the situation is better than the rest of the EU. In particular, the inflation rate in November and December was 2%, which would have been optimal for the ECB if such inflation was observed in the entire eurozone.
The shutdown of the government in the US for a long period of time has had a negative impact on the USD value. Moreover, it is not clear when the government will resume its work. In any case, each new week without a government reduces the prospects for continued economic growth in the United States, when the work of a number of important agencies is paralyzed. In this situation, investors prefer to invest in safe assets, though the SEK is also strengthening against the dollar.
