Swedish Krona Strengthens as Growth Accelerates: Stockholm Mover
Sweden’s krona rose to the highest level in more than two months against the dollar after a report showed that economic growth unexpectedly accelerated in the second quarter.
The krona rose as much as 0.61 percent against the dollar to 6.8248, the highest level since May 8, and traded at 6.8356 as of 11:39 a.m. in Stockholm. It advanced 0.9 percent versus the euro to 8.3859 and was stronger against all the major currencies tracked by Bloomberg.
Growth in Sweden’s gross domestic product accelerated to a seasonally adjusted 1.4 percent in the second quarter from a revised 0.9 percent in the first-quarter, according to Statistics Sweden. That beat an estimate of 0.2 percent growth of 13 economists in a Bloomberg survey. Annual growth was 2.3 percent, up from 1.5 percent in the first quarter.
“This just gives the currency market more ammunition to continue to buy the” krona, Carl Hammer, chief foreign exchange strategist at SEB AB, said by phone from Stockholm. “The trend right now is that the krona will continue to appreciate. That will mean import prices will go much lower, CPI will undershoot the target and it will mean more Riksbank rate cuts eventually.”
Policy makers at the Swedish Riksbank indicated in the minutes of their July 3 meeting that they’re seeking to reconcile an “unexpectedly strong development” of the local economy” with “increased concern” about the euro area. The central bank held its main rate at 1.5 percent, after two cuts since December, and signaled it may ease once again by year-end.
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