22.11.201715:07 Forex-elemzések és áttekintések: Global macro overview for 22/11/2017

An interesting statement was released by the Swedish central bank, Riksbank. According to it "high and rising household indebtedness currently poses the greatest risk to the Swedish economy." Moreover, we can read that "it is important therefore that the proposal for a stricter amortization requirement is put in place. It is also important to implement measures within housing and tax policies to increase the resilience of the household sector and reduce the risks. A slower rate of price increase for housing will contribute to a more stable development on the housing market and a slower rate of increase in household debt."

Riksbank sees slowed rate of increase in housing prices is positive as households are sensitive to shocks as the debt has continued to increase more rapidly than household income. Moreover, the banking system's exposure to property makes it vulnerable which is why is important for the banks to have self-insurance by holding adequate liquidity reserves so that they can manage the liquidity risks they take in their operations.

Let's now take a look at the USD/SEK technical picture after the statement was released. The Swedish Krona is appreciating across the board as the price has reversed from the local highs at the level of 8.5268 and broke below the technical support at the level of 8.4461. Moreover, the momentum indicator is below its fifty level and it is pointing down as the price is coming off the overbought conditions. The next technical support is seen at the level of 8.3665.