The EUR/SEK forex currency pair denotes the value of the euro against the Swedish krona. Sweden is a member of the European Union but opted to retain its native fiat currency. The EUR/SEK has therefore become a reliable barometer for the relative strength of the Swedish economy compared with the euro as a whole.
The Euro to SEK pair is described in the forex markets as an ‘exotic’ currency pair, as it involves only one major currency and one from an emerging market i.e. Sweden. As with many other exotic forex pairs, the Euro to SEK pair lacks the same liquidity as the ‘major’ forex pairs like GBP/USD and EUR/USD. The spreads between the ‘buy’ and ‘sell’ price on the EUR/SEK are typically wider.
The strength of the Swedish krona is often interlinked with the performance of other Scandinavian economies. SEK bears a strong correlation with other Nordic currencies, including the Norwegian krone (NOK) and the Danish krone (DKK).
The krona has been the fiat currency of Sweden since 1873 when it was deputised for the Swedish riksdaler. In 2003, 56% of Swedish voters opted not to convert to the euro, despite the Maastricht Treaty stating that Sweden is obliged to convert at some point.
Since then, the EUR/SEK has been quite strong in favour of the euro, at least post-2008 following the global financial crash. EUR/SEK rose above 11.50 krona to the euro in 2009, before plunging to as low as 8.26 krona in August 2012, amid the eurozone debt crisis. It has been one-way traffic since, with the pair weakening to approximately 10.82 krona to the euro.
The Swedish krona is regarded as something of a safe haven despite its comparatively small economy. With a well-educated, tech-focused employee base, Sweden has fast become a home to multinationals across a wide range of sectors.
Of course, that doesn’t mean it’s immune to volatility and the Euro to SEK pair has certainly shown that through the years. The Swedish government’s decision to loosen its economic policy back in 2015 through to 2019 played a key role in the krona’s weakness against the euro.
Did you know? It’s possible to profit when trading an asset, even if its value falls. Using contracts for difference (CFD) brokers, it’s possible to go long (buy) or short (sell) on forex pairs like the Euro to SEK. This means if the price falls and the krona strengthens against the euro, you can still profit by opening a short (sell) position.
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* The spreads provided are a reflection of the time-weighted average. Though Skilling attempts to provide competitive spreads during all trading hours, clients should note that these may vary and are susceptible to underlying market conditions. The above is provided for indicative purposes only. Clients are advised to check important news announcements on our Economic Calendar, which may result in the widening of spreads, amongst other instances.
The above spreads are applicable under normal trading conditions. Skilling has the right to amend the above spreads according to market conditions as per the 'Terms and Conditions'.
What affects the currency pair EUR SEK?
The value of the euro relative to the Swedish krona is heavily influenced by a variety of economic and geopolitical factors, such as global growth, inflation, government policies, and investor sentiment.
If global economic growth is strong, the euro and Swedish krona can both appreciate against other currencies. If inflation levels in the European Union or Sweden are higher than expected, it can cause the euro to weaken and the Swedish krona to strengthen against other currencies. Similarly, if inflation is lower than anticipated, it can lead to appreciations of both currencies.
When either central bank changes its interest rates or engages in quantitative easing programs, it can cause movements in both currencies relative to each other. If investors are optimistic about the euro or the Swedish krona, they may buy more of the currency, which can drive up its value.
When is the best time to trade the EUR/SEK?
The EUR/SEK currency pair is one of the most volatile pairs on the Forex market, making it a risky but potentially profitable trading opportunity. The best time to trade this pair varies, depending on what type of trader you are and your own trading strategy.
For short-term traders who focus on intra-day movements, the most active trading times are usually around the start of European markets (8:00 CET) and when liquidity is high, such as when both London and Stockholm markets are open (14:30-17:00 CET). During these times, spreads can be tight, which helps to reduce transaction costs.
Longer-term traders, on the other hand, may want to focus on news that can significantly impact the EUR/SEK rate. This could include economic data such as interest rate decisions, GDP figures or inflation data. These events usually occur on a regular schedule and can be seen in advance in an economic calendar.
How to trade EURSEK?
The EURSEK is prone to high volatility, so it's important for traders to understand how to manage risk when trading this pair. Here are some tips for trading the EURSEK:
1. Watch for Unexpected Events – Since this is a volatile pair, it's important to be aware of any news or developments that could have an impact on the EURSEK rate.
2. Utilize Risk Management Tools – You could use stop-loss orders and limit orders to limit your risk when trading this pair.
3. Utilize Technical Analysis – Technical analysis can be a great tool for traders looking to make successful trades on the EURSEK. Familiarize yourself with chart patterns and indicator signals that may provide insights into the movements of this pair so you can better predict its future direction.
Why Trade [[data.name]]
Make the most of price fluctuations - no matter what direction the price swings and with low capital investment.