Strong economic growth in a country tends to correspond to an increasing share of that country’s currency in the global market portfolio. Investors need to be induced to increase their allocations to that country and currency, which weakens the currency and increases the risk premiums.
the above is quote from schweser notes, I don’t really understand the second sentence. If investors need to induced to increase their allocation to that country and currency. Why would that weaken the currency? If the country has a strong economy and the demand for their currency increases, wouldn’t that strengthen that currency, not weaken it?