What does the data mean to the market?
The Sveriges Riksbank Executive Board's decision on where to set the benchmark interest rate. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.
A higher than expected rate is positive/bullish for the SEK, while a lower than expected rate is negative/bearish.
Historic deviations and their outcome
December 19 2019 Spike but retrace due to not being a total surprise on this occasion.
See Chart here:
https://calendar.galaxysoftwareinc.com/#/chart;i=13626;t=2019-12-19%208:30:00.0;s=USDSEK;r=S5
December 20 2018 Great move on SEK pairs, as we would like to see today.
See Chart here:
https://calendar.galaxysoftwareinc.com/#/chart;i=2446;t=2018-12-20%208:30:00.0;s=USDSEK;r=S30
I will use forecasts of:
Interest Rate Decision 0
SE Rates Forecast Q1 0
SE Rates Forecast Q2 0
SE Rates Forecast Q3 0
SE Rates Forecast Q4 0
SE Rates Forecast Q5 0
SE Rates Forecast Q6 0
SE Rates Forecast Q7 0
Today's trade plan
Today we don't expect any move from the Interest rate. But we may get some activity from the rate path. Previously the path was flat, with all lines showing 0. However, today, if any of the lines show a positive or negative deviation and don't conflict with each other. Then we can look to take a trade in the direction of the deviation.
We also get Quantitative Easing (QE) at the same time. The problem we see with this event is SEK IR path could be up or down. (a cut by the end of 2021 and 10% to a hike by 2024) BUT the QE may counter-act to the longer-term path. So, we may get a positive path, but short term QE increase or vice versa effectively a conflict.
If all deviations align, we could see a prolonged move.
Tradable pairs
EURSEK
USDSEK
Hope this helps but please do your own analysis!!
Good luck!!
James Thatcher
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
There were no changes to the forecast interest rates; they will remain at 0% for the foreseeable future, there was no conflicting additional quantitative easing. Price actions were very dull; however, these trades can make a small fortune if a surprise hits the market, and that's why I set up for these interest rates.
See Chart here:
https://calendar.galaxysoftwareinc.com/#/chart;i=43349;t=2021-4-27%207:30:00.0;s=USDSEK;r=S2