- Sweden’s exports surged 1.1% against 0.9% in the import market in May 2021 (MoM).
- Sweden’s gross domestic product (GDP) is projected to hit 4.7% in 2021.
- The EU has lifted travel restrictions against US citizens, with Sweden set to resume relations on June 30, 2021.
The USDSEK pair lost 1.39% in the week ending on June 25, 2021, but gained 2.19% (MoM) after closing at 8.4879. The krona rose against the US dollar after Sweden’s producer price index (PPI) inched up 1.3% (MoM) from a prior reading of 1.7%. On an annual basis, the PPI gained 7.9%, with monthly prices related to energy soaring 39.2%.
There was a 1.1% increase in Sweden’s export market against a 0.9% in the import market (from April-May, 2021). Rising wood prices ensured the domestic/home sales market gained 1.4%, with the yearly rate at +9.9%. Others that contributed to strong export sales include the prices of basic/nonferrous metals and electricity charges. There was a 0.1% decrease in the price of motor vehicles/trailers while the import of crude oil gained 0.3%.
Political upheaval
After losing his grip of Sweden’s Parliament through a vote of no-confidence (on June 21, 2021), Prime Minister Stefan Löfven is required to either resign or call on a snap election. With the end of June 2021 deadline, it is interesting to see how this political quagmire will play out against the krona. The election is expected to cost the government 400 million kronor.
Sweden’s gross domestic product (GDP) is projected to hit 4.7% in 2021 (as predicted in May 2021) against a 3.2% forecast made in April 2021. In 2022, GDP growth may slow to 2.9% from an earlier prediction of 3.8%.
To help ease the effects of the pandemic, the Swedish government added 400 billion kronor ($47.19 billion). The stimulus was used in furloughs since Sweden chose to avoid a lockdown at the expense of the economy. Since December 2019, the Swedish economy has dropped by 1%.
Coronavirus cases
Up to 14,619 deaths have been recorded from coronavirus from 1.09 million cases. Active daily cases in Sweden have decreased 88.35% from 174,560 cases on April 24, 2021, to 20,336 cases as of June 27, 2021.
Active cases in Sweden
Approximately 26.6% of the population (2.72 million) has been fully vaccinated from the issuance of 7.23 million Covid-19 vaccines. Following the aggressive vaccination campaign, Sweden plans to reopen its borders on June 30, 2021, with US tourists among those allowed entry.
The EU has also lifted travel restrictions on the US. Travelers will be required to provide proof of negative test results (on Covid-19) through certificates. This policy will apply to those vaccinated or unvaccinated as long as they are 18 years old and above.
America currently boasts of the highest Covid-19 vaccination numbers at 322 million, with up to 152 million people fully vaccinated. It represents 46.4% of the population, slightly below the UK, which is at 48.4%. US Covid-19 cases have shrunk by more than 98% from January 2021 highs of 300,000 cases to 4,165 cases as of June 27, 2021. At the same time, deaths have reduced to less than 100 from peaks of 4,000 in January 2021.
The Swedish krona will be affected by retail sales data scheduled for release on June 28, 2021. As of April 2021, retail sales (YoY) had declined 7.2% from a prior record of 8.1%.
Technical analysis
The USDSEK formed a rounding bottom with an upward breakout at 8.4296. The pair were moving above the 9-day EMA at 8.4683 and headed towards 8.5526.
The 14-day RSI supports a high buying momentum at 61.98 (with the overbought zone at 70.00).
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