The symbol USD/SEK is known in the world of finance as a currency pair. The currency pair is designed to compare the values of two currencies; in this case the United States Dollar and the Swedish Krona. The comparison is done by asking a simple question… Using only a single unit of the first currency in the pair, how many units of the second currency in the pair can be purchased? So, in the case of the USD/SEK currency pair, the question is, “Using only one United States Dollar, how many units of the Swedish Krona can be purchased?” In the world of binary options, traders make predictions with regard to whether the answer to this question is likely to rise or fall. If the trader believes that the answer to the question is likely to rise, he purchases a call option. Adversely, if the trader believes that the answer to this question is likely to fall, he purchases a put option.
Historic USD/SEK Price Movements
Starting off in 2005, the USD/SEK currency pair started with declines. During this time, economic conditions around the world were overwhelmingly positive. So, both the United States and Swedish economies were on a growth trend. However, the Swedish Krona grew in value at a faster rate than the value of the United States dollar; leading to declines in the pair that lasted until 2008.
In 2008 an economic crisis fueled by sub-par lending in the United States swept the world. Soon, the world was in an economic recession. During this time, both the Swedish and the United States economy proved to be struggling. Nonetheless, the United States Dollar held its value quite a bit better than the Swedish Krona in the face of worldwide financial devastation. As a result, we saw a drastic climb in the value of the USD/SEK currency pair.
As economic conditions around the world started to improve, the Swedish Krona started to recover in a big way; and while the United States Dollar was going through it's own recover, it simply wasn't able to keep up pace with the Krona. As a result, we saw declines in the value of the pair. From there, the next major movement would come in the year 2014.
In 2014, Sweden's reliance on the European Union was called into question. During this time, the Eurozone came upon a financial crisis of its own; and thanks to Sweden's strong ties with Europe, the struggles trickled down to Sweden. Ultimately, the Swedish economy started to stall; leading to massive declines in the value of the Swedish Krona. As a result, the value of the USD/SEK currency pair started to grow exponentially. This climb recently came to a halt and the pair has been trading relatively sideways since. Make sure to follow startling financial news to keep informed about currecy fluctations.
What Causes Movement In The Value Of The USD/SEK Pair
Currency pairs move in value based on the health of the worldwide economy and the health of the economic regions represented by the currencies listed in the pair. With regard to the USD/SEK pair, here's how it works…
- Worldwide Economic Conditions – When economic conditions around the world are positive, the Swedish Krona tends to gain in value at a faster rate than the United States Dollar; leading to declines in the pair. Adversely, under poor worldwide economic conditions, the dollar tends to hold value better than the krona; leading to increases in the value of the USD/SEK currency pair.
- Economic Conditions In The United States – When economic conditions are positive in the United States, the value of the United States Dollar grows. If the Swedish economy isn't moving on a positive path during these times, we tend to see gains in the value of the USD/SEK currency pair.
- Economic Conditions In Sweden – When economic conditions in Sweden are positive, we tend to see declines in the value of the USD/SEK currency pair, regardless of how the US economy is doing. However, when conditions are negative with regard to the Swedish economy, we tend to see gains in the pair.