The Swedish krona dropped to the weakest level in more than three weeks against the euro on Wednesday, as both consumer confidence and the nations trade balance came in well below expectations.
EUR/SEK touched a daily high at 8.9036 at 09:24 GMT, after which consolidation followed at 8.8996, adding 0.54% for the day. Support was likely to be received at March 25th low, 8.8464, while resistance was to be met at February 28th high, 8.9389.
Demand for the Swedish krona was pressured after a monthly survey on consumer confidence showed that consumers in Sweden were more pessimistic about their financial prospects during March. The gauge of consumer confidence fell to a reading of 99.6 this month, short of analysts expectations for an increase to 101.8. At the same time, Februarys reading was revised down to 99.7 from 100.3 previously reported.
A separate report by the Statistics Sweden revealed the nations trade surplus shrank to 5 billion SEK in February, from 5.8 billion in the previous month and trailing anlysts estimates of an increase to 6.1 billion SEK. Balance of Trade in Sweden averaged 3.873 billion SEK from 1960 until 2014, registering a record-high of 21.9 billion SEK million in March of 2006 and a record low of -4.2 billion SEK million in August of 1982. The European union is the biggest trading partner of the country as it accounts for about 61% of exports and 72% of imports.
Meanwhile, demand for the 18-nation common currency remained under pressure after yesterday data showed a gauge of business sentiment in Germany, the euro area’s largest economy, fell this month.
The index of business climate in Germany dropped to 110.7 in March from 111.3 a month ago, the strongest since July 2011, the German research institute, Ifo reported yesterday. Analysts predicted a smaller decline to 110.9. The index is based on a survey, encompassing almost 7 000 companies operating in manufacturing, construction, retail and wholesale trade.
“If any downside risks to this scenario appear, we stand ready to take additional monetary policy measures that ensure our mandate is fulfilled,” European Central Bank President Mario Draghi said yesterday, cited by Bloomberg. ECB policy makers, who lowered the main interest rate to a record-low 0.25% in November, are set to reconvene on April 3rd.
Elsewhere, AUD/USD hit a session high at 0.9216 at 08:20 GMT, after which consolidation followed at 0.9211, adding 0.51% for the day. Support was likely to be received at March 25th low, 0.9120, while resistance was to be encountered at November 22nd high, 0.9250.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
