Crispus Nyaga

Crispus Nyaga is a Nairobi-based trader and analyst. He started trading more than 7 years ago as a student. He has published in several reputable websites like The Street, Benzinga, and Seeking Alpha. He focuses mostly on G20 currencies, commodities like Crude oil and Gold, and European and American large-cap companies.

Sweden is a European country with more than 9 million residents. The country has a GDP of more than $538 billion. It derives most of its income from trading with the rest of European countries. Its main trading partners are Germany, Norway, Denmark, Netherlands, and UK, which are responsible for 18.2%, 9%, 8.3%, 6.5%, and 5.7% respectively. The country’s main exports are industrial machinery, automobiles, paper products, and iron while its top imports are machinery, motor vehicles, iron and steel, and foodstuffs among others. The country uses the Swedish Krone, which also forms part of the US dollar index. The country is also known for its strong socio-capitalism approach, where income taxes are at 56.4%.

This week, attention will remain in Sweden, as investors expect the release of interest rates decision by the country;’s central bank. The Riksbank decision will come on Thursday, and the bank is expected to leave interest rates unchanged at -0.25%. The bank raised interest rates lastly in December last year, when it moved them from -0.50% to -0.25%. The rate hike was the first in seven years.

In recent years, the country’s inflation have stabilized to below the Riksbank’s target of 2.0%. This month, the CPI numbers showed that the CPI increased by 1.9%, which was higher than the expected 1.8%. The CPI has remained in these levels for the past few months. At the same time, the producer price index (PPI) has been relatively stable. In March, the number showed that the PPI rose by 6.3% in February, which was higher than the previous 5.3%. In the fourth quarter, the country’s economy expanded by 2.4%, which was higher than the expected 1.5%. Still, this growth was lower than the 3.3% experienced in the first quarter of the year.

Therefore, in this week’s interest rates decision, investors will focus on the statement from the Riksbank. They will want to know whether the bank plans to raise rates this year, or whether it intends to slash guidance as other central banks have done.

In the past one year, the USD/SEK pair has been making higher lows and higher highs as shown below. The pair has recently reached the YTD high of 9.50, and declined slightly. On the chart, the price is slightly below the 21-day and 42-day moving averages. The RSI has moved slightly upwards while the Parabolic SAR remains below the price. The pair could remain at these levels ahead of the important interest rates decision later this week.

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