Krona Gains as Industrial Production Revives: Stockholm Mover
Sweden’s krona gained after a report showed industrial production rose more than predicted, adding to evidence a recovery in the largest Nordic economy is picking up.
The krona gained as much as 0.37 percent, and strengthened 0.27 percent to 8.6424 per euro as of 11:47 a.m. in Stockholm. It was the second-biggest gainer against the euro after the New Zealand dollar among the 16 major currencies.
Industrial output rose a monthly 3 percent in June, Statistics Sweden said today. That beat the median estimate for a 1 percent increase on the month in a Bloomberg survey of analysts. Industrial orders rose 1.9 percent in the month.
The “numbers are in line with forward-looking indicators like PMI and the economic tendency indicator which have indicated a significantly more robust development of industrial activity than we’ve seen in the actual production figures in the past few months,” Anna Raman, an analyst at Nykredit Markets A/S in Copenhagen, said in a note. “It’s also in line with unexpectedly positive economic indicators around the world. That’s true not the least for Germany.”
Sweden’s central bank last month kept its main lending rate at 1 percent for a third meeting after cutting it four times in a year as it predicted growth prospects around the world will improve. It forecast no more cuts and said it will start raising rates in the second half 2014. The bank will announce its next rate decision on Sept. 5.
While the Swedish economy grew less than predicted in the second quarter, the National Institute of Economic Research last month forecast manufacturing (PMISSURV) production and orders will start to pick up. Manufacturing and services activity expanded last month, according to surveys by Swedbank AB.
“Indicators for Swedish industry have improved in recent months and the second quarter probably marked the trough for production in this cycle,” said Torbjoern Isaksson, chief analyst at Nordea Bank AB (NDA), in a note. “However, the modest improvement in the order intake in June suggests that the recovery will be rather slow.”
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