The upward trend continues but it is losing its intensity. This week both currencies were supported. However, the US dollar retreated despite positive data in the building sector and despite a decrease of the U.S trade deficit to the lowest in three years. Investors still doubt the success of the tax reform and are waiting for the completion of the final stage of the adoption of tax reform. This law should be considered by the U.S. House of Representatives today, after which it will be submitted to the President for approval.
The Swedish Krona received support today, despite the decision of the Riksbank to leave the interest rate unchanged at a record low level -0.5%. This decision has been explained with the necessity to achieve an inflation target of 2%. Therefore, Riksbank decided to continue the previously adopted expansionary monetary policy. At the same time, they expect that by the middle of 2018 this goal will be achieved and from that moment on they will slowly raise interest rate.
Earlier it became known that inflation in November amounted to 1.9%, which is above forecasts. Furthermore, the data about the employment market in Sweden showed a rapid decrease in unemployment in November to 5.8%, which is the lowest unemployment level over the last nine years. Thus, we can say that the Swedish economy is currently growing, which will have a positive impact in the long term for the SEK. This is how the upward trend can transform into a flat or a downward one in the future.
Tomorrow the market is expecting data about the GDP of the United States. In addition, the results of voting on tax reform in the House of Representatives should be known. By the end of the week the volatility will have gone down and will remain low until the end of the Christmas and New Year holidays. The MACD and Stochastics oscillators indicate the efficiency of the deals to BUY, according to the current upward trend. In the short-term perspective such deals can be most effective.
