By Dan Eduard – Following an election day shakeup in Sweden, in which the Prime Minister’s party failed to secure the necessary votes to form a parliamentary majority, the Swedish krona was able to make modest gains against both the US dollar and euro. The currency market typically experiences a lot of fluctuation in times of political turmoil, and today was no different.
USD/SEK dropped over 700 pips since markets opened for the week before staging a very modest correction. Currently the pair is trading around the 7.0190 level. EUR/SEK dropped almost 600 pips in the same amount of time and is currently trading around the 9.1950 level. It appears that until a government is formed, the SEK is likely to move back and forth against its main currency rivals. At the moment, the currency is most definitely in a bullish trend.
The other Scandinavian currencies have not been as profitable as their Swedish counterpart. The Norwegian krone has seen decidedly mixed results against the US dollar and euro, and is currently bearish against both. The Danish krone on the other hand has seen steady gains against the US dollar as of late. USD/DKK has tumbled almost 1900 pips over the last week, and is currently trading around the 5.6840 level.
The Scandinavian kroner is likely to see another volatile week, as significant economic publications are forecasted from both the US and euro-zone. Traders will want to pay attention to the most recent US Federal Funds Rate statement on Tuesday, as well as a batch of French and German news being released on Thursday. Should any of the news boost investor come in at or above expectations, the Scandinavian currencies are likely to see mid-week gains.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
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