- The Krona appreciates moderately to the 10.80 region.
- The cross retreats from YTD highs around 10.85.
- Sweden CPI surprised to the upside in April.
The Swedish Krona is picking up extra pace on Tuesday and is now dragging EUR/SEK to the area of daily lows in the sub-10.80 region.
EUR/SEK lower post-CPI
After reaching fresh 2019 lows vs. the single currency in the 10.85 neighbourhood on Monday (levels last seen in July 2009), the Swedish Krona has managed to regain some composure in the wake of today’s release of inflation figures for the month of April.
In fact, tracked by the CPI, consumer prices rose at a monthly 0.7% and 2.1% over the last twelve months. In addition, prices measured by the CPIF (CPI at constant interest rates) rose 0.6% MoM and 2.0% from a year earlier, all prints matching the Riskbank projections.
Still in Sweden and earlier in the session, the unemployment rate ticked lower to 6.7% during the last month from 6.9%.
What to look for around SEK
It seems the the strong depreciation of the Krona in past months appears to have echoed in the domestic inflation figures, pushing the CPI higher during April, in line with the Riksbank’s forecasts. That said, the Scandinavian central bank still keeps a rate hike on the table at some point in H2 2019 or early 2020 in spite of increasing skepticism among investors, particularly against the backdrop of the ‘neutral for longer’ stance now expected from the ECB, in line with the majority of its G10 peers.
EUR/SEK levels to consider
As of writing the cross is losing 0.22% at 10.7886 and a break below 10.7458 (10-day SMA) would expose 10.6283 (21-day SMA) and finally 10.3769 (low Apr.1). On the other hand, the initial hurdle emerges at 10.8498 (2019 high May 13) seconded by 11.1167 (monthly high July 2009) and then 11.1542 (monthly high June 2009).
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