The rates continue within the upward trend formed in the beginning of 2018 and are steadily approaching the price maximum that's remained unsurpassed in the last 18 years. The mark of 9.45 SEK was tested 2 weeks ago and in December 2016. At the same time, the US currency has lost the basic factor that supported it last year: the FED's aggressive policy has come to an end. At their last meeting, the regulator stated that there is no need to actively raise the rate. The maximum that can be expected in the current situation from the FED is only one increase in 2020, so we can say for sure that the FED's hawkish rhetoric remains in the past. In addition, the FED has reduced forecasts of GDP growth and inflation, and revised forecasts for unemployment. In this regard, the value of the dollar fell against most currencies.
Nevertheless, the USD can still count on good macroeconomic reports, and hence on further strengthening. The recently published Philadelphia FED manufacturing activity index rose to 13.7 pips in March, surpassing forecasts more than twice. A month earlier the index was negative at -4.1 pips. Last week the number of open vacancies in the United States achieved an all time high for January - 7581 million jobs.
Amid the weakening of the dollar the Swedish Krona could be well-strengthened. However, in the absence of news on the Swedish economy, the rates were fully dependent on the overall situation in the EU, where the economic downturn continues. Despite a number of positive signals, such as the recovery of the trade surplus, the data on the PMI indices of business activity and data on the construction output indicate the continuation of the economic recession, which allowed the USD to recover after the decline following the results of the FED meeting. In particular, the index of business activity in the industrial sector fell for the eighth month in a row to 47.6 pips, which is lower than investors' expectations. An alarming signal is also finding the index below the level of 50 pips for a second consecutive month. The PMI Composite index of business activity was above 50 ips, but also fell more than expected on the market.
In this situation, the most optimal would be the deals to BUY in favor of the USD, given also that next week US GDP data is expected, as well as releases on the trade balance and the real estate market. The probability of getting positive data on the US economy at the moment is higher than in the EU and Sweden. The Stochastic oscillator also signals about the efficiency of the deals on the trend. At the same time, it should be noted that approaching the price peak of SEK 9.45, the growth may be limited to this level, and the Swedish Riksbank regulator may intervene to strengthen the SEK, which also suggests the approach of an excellent moment for opening the short deals in the range of 9.37 - 9.45 SEK.
