Swedish krona rises on favorable Services PMI, industrial production
The Swedish krona gained against the US dollar on October 5, 2015, on a slew of macroeconomic releases that provided optimism to the Scandinavian currency. The sentiment was buoyed by the Services PMI (Purchasing Managers’ Index) in the month of September, which released above the threshold 50 figure, its highest level since May.
Industrial production also released at a positive note in August after negative figures in July. The Swedish krona gained 0.67% against the euro and 0.63% against the pound sterling. The US dollar–Swedish krona pair ended the day lower by 0.16%.
Macroeconomic data boost confidence
Industrial production for the month of August released at 3.8% on an annual basis compared to a fall of 2.0% in the previous month. The figures drastically exceeded expectations of an increase of 0.3%.
On a month-over-month basis, industrial production grew 4.7% in August against an expectation of 1.5% and a huge fall of 4.0% in July. Looking at new orders, the index remained unchanged in August at 97.20 points, the same level since July. The Services PMI increased to 57.0 points in September from 52.4 in the previous month, underscoring that the services industry has been performing well.
Impact on the market
The iShares MSCI Sweden ETF (EWD), which trades on the New York Stock Exchange, rose 2.65% on October 5, 2015. The WisdomTree Europe Hedged Equity ETF (HEDJ) was also trading on a positive bias and rose 2.51%.
The Swedish ADR (American Depositary Receipt) LM Ericsson Telephone Company (ERIC) was buoyed by the positive news and ended the day 2.57% higher. Among other Scandinavian ADRs, petroleum company Statoil ASA (STO) rose 1.60%, while fisheries major Marine Harvest (MHG) rose 1.63%.