USDSEK trades 0.33 lower at 9.3879 after Riksbank raised rates to 0% from negative -0.25 as was expected by markets. The Swedish economy has entered a phase with more moderate growth. The Swedish economy is going from a stronger-than-normal cycle to a more normal situation The outlook for inflation is unchanged and the interest rate is expected to remain at 0% in the coming years.
Riksbank was the first central bank to charge commercial banks for deposits rather than pay them interest rate. In 2015, decreased its key policy rate below zero, after a similar move by the ECB in 2014.
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USDSEK gives up some pips after the interest rate decision and trades 0.24% lower at 9.4021, close to daily lows. The pair is under selling pressure since late November amid USD weakness.
On the technical analysis side the momentum is bearish for the pair as it trades below all major daily moving averages. The rebound from monthly lows at 9.3273 canceled today after the Riksbank decision. Support will be met at 9.3823 the daily low. If the forex pair breaks below that level then the next target is at 9.3272 the low from December 13th.
On the upside, first resistance stands at 9.4246 today’s top, a break above might drive prices up to 9.5000 the high from December 11th. Bulls will gain control if the pair breaks above 9.5348 the 200-day moving average.