Sweden's krona weakened as a recent report showed the largest Nordic economy grew by less than expected last quarter. The news sent the krona down on Wednesday as much as 0.5 percent against the euro to trade at 9.2378 in Stockholm, reports Bloomberg.
Magnus Alvesson, the head of economic forecasting at Swedbank AB, said by phone, "This is disappointing and indicates that Sweden's economic recovery isn't as strong as we had expected. External demand is weaker and companies' investments are delayed while consumers continue to spend," according to Bloomberg.
The report showed that the economy grew an annual 1.9 percent, compared with the estimated 2.4 percent. According to Statistics Sweden on Wednesday, after contracting 0.1 percent in the first quarter, gross domestic product expanded a quarterly 0.2 percent in the three months through June. GDP was expected to grow 0.6 percent in a Bloomberg survey of eleven economists.
After an unexpected rate cut by Riksbank that saw a 2.5 percent rally in the cross, a positive surprise in consumer price inflation has assisted in improving the sentiment for the krona. However, the increase in the unemployment rate to 9.2 percent in June from 8 percent in May, aided the recent weakening of the Swedish currency.
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