Sweden’s krona weakened the most in more than two weeks against the euro as a survey of businesses and consumers indicated that the economy had weakened more than expected.
The krona weakened as much as 0.87 percent against the euro, the most since Nov. 9, and declined 0.83 percent to 8.6453 as of 1:33 p.m. in Stockholm. It depreciated 0.89 percent versus the dollar and was weaker against all major currencies in a basket compiled by Bloomberg.
The economic tendency indicator declined to 86 in November from a revised 92.7 a month earlier, the National Institute of Economic Research said today. That compared with an estimate of 91.5 in a Bloomberg survey of 6 economists.
“This indicator level clearly signals negative year-on- year growth,” Anders Brunstedt, an economist at Svenska Handelsbanken AB (SHBA), said in a note. “Even if the third-quarter GDP data on Thursday should hold a positive surprise, we think it’s reasonable to expect the Riksbank to lower its growth forecast in the shorter term.”
The central bank in October signaled it may cut interest rates next month for a fourth time since December as an expansion slows amid falling exports. Companies such as Ericsson AB (ERICB), the world’s largest maker of mobile phone networks, and truckmaker Volvo AB (VOLVB), are cutting jobs to cope with slumping demand.
The consumer confidence index fell to minus 7.4 from minus 2.9 the previous month, the Stockholm-based research institute said today. A manufacturing confidence index fell to minus 18 from minus 16, which was in line with estimates.
The reports suggest that “economic activity is substantially weaker than normal,” Anna Raman, a senior analyst at Nykredit A/S in Copenhagen, said in a note. She expects Sweden’s economy to contract this quarter.
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