The Sweden country-specific exchange traded fund could be picking up speed as the Swedish economy is growing faster than previously expected.
Swedish markets were strengthening after the government revealed gross domestic product expanded 1.1% over the fourth quarter, or twice the 0.5% estimated growth rate, Bloomberg reports.
“On the one hand, the Swedish economy is strengthening, and on the other hand the krona is strengthening, which pushes down inflation pressure in Sweden,” Magnus Alvesson, head of economic research at Swedbank AB, said in the article.
However, the strengthening economy bolstered the Swedish krona, which appreciated as much as 1% against the euro and 1.2% versus the U.S. dollar.
Some of Sweden’s larger companies are struggling due to weak demand from Europe, the country’s largest export market, as the krona currency appreciated against the euro. However, lower central bank rates has helped stimulate household spending.
The Swedish central bank recently cut its benchmark rate below zero for the first time and started buying bonds to combat deflationary pressures. However, if the krona continues to strengthen, the Riksbank could be forced to implement more aggressive measures. [Denmark ETF: Central Bank Loves Rate Cuts]