USD/SEK (US Dollar vs. Swedish Krona)

The USD/SEK pair isn’t one that people typically think of when they trade Forex. However, it will probably surprise you to know that this pair is actually part of the US Dollar Index. That futures contract is a basket of currencies versus the US dollar in order to measure and play US dollar strength or weakness. Because of that, this pair does have a certain amount of influence in the futures and Forex markets.

However, very little is known about Swedish economy by most Forex traders. You have to think about Sweden as a proxy for economic expansion. Sweden tends to be very quick to embrace technology, so there is a certain correlation to the NASDAQ in this particular pair. With that in mind, you have to think of the Swedish krona as a “riskier” currency, as money will flow out of the United States and look for opportunities in stable but rapidly growing economies such as Sweden.

There is also an interest-rate differential play when it comes to this currency pair typically, as the United States tends to have lower interest rates than Sweden and the rest of Scandinavia. So in that sense, it has the same driving force that a lot of currency pairs have. However, you have to keep in mind that this pair is highly sensitive to global risk, so most certainly this market will rise in times of economic concern, just as it will fall in favor of the Swedish krona in times of economic strength.

USD/SEK Live Charts:



Which Major Economic Events Impact the

The economic announcements that influence this pair are the same as many other ones. Obviously, interest-rate announcements out of both the Federal Reserve and the Sveriges Riksbank can have a major influence on where this pair goes, as the interest-rate differential either widens or shrinks. Ultimately, measures of global risk appetite will typically be the biggest movers of this pair. So for example, if the stock markets around the world are doing fairly well, the Swedish krona tends to do fairly well. Also, keep in mind that commodities can be a measure of global risk appetite as well, so as they go higher, this pair tends to go lower as well.

Such announcements as GDP out of Sweden will influence this market, just as GDP out of the United States. Keep an eye on employment numbers out of the United States, because as employment strengthens, it stands to reason that global trade will as well. After all, the United States is the largest consumer market, and this allows for global risk appetite to expand as companies look for opportunities overseas. As mentioned previously, if the NASDAQ is rising typically this pair will do fairly well also. However, it’s not a perfect correlation as sometimes money simply flows into US stock markets to avoid other stock markets. You need to see an overall pattern of positivity in the stock markets to believe that the Swedish krona is going to go higher in value.

What is the Average Spread on the USD/SEK?

The spread is high in this pair, typically 20 pips or more, but the PIP value is smaller. It is a liquid enough pair to trade though. It’s not necessarily one you want to scalp, so this is more or less a swing trader’s type of market, if not a long-term traders type of market. It tends to move the most during European trading, but can be influenced during the US markets as well. During Asian trading, this pair all that goes to sleep as there are no locals to trade this market. While this is a market that is influenced by a global risk appetite, it’s not necessarily traded by the entire globe.

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