BoE Division Boosts UK Outlook, GBP DKK Exchange Rate Soars

The Pound jumped by 0.7% against the Danish Krone following a surprising development in the Bank of England (BoE) interest rate decision.

The Krone Pound exchange rate has progressively worsened over the course of the week, with continued declines in oil prices keeping DKK down.

Pound Krone Update: BoE’s Forbes Supports GBP by Dissenting in Interest Rate Vote

The biggest Pound-supporting news of late has been the Bank of England (BoE) interest rate decision, which was initially expected to have no real impact.

While the UK rate remained at the record-low 0.25%, policymaker Kristin Forbes notably bucked the trend and voted to raise UK interest rates, citing concerns about the effect of unchecked inflation.

This unexpected hawkishness sent the Pound soaring across the board.

While traders have been excited by the hint of an eventual UK rate hike, Money.co.uk Editor-in-Chief Hannah Maundrell has brought expectations back down to earth;

‘Today’s interest freeze is no surprise, the BoE won’t budge on interest rates for a while yet. With our world thrown into uncertainty by Brexit, wage growth stalling and inflation creeping up they need to tread carefully even with the drop in unemployment’.

GBP/DKK Exchange Rate Forecast

Next week, Pound/Danish Krone exchange rate movement may occur as a result of UK inflation rate figures on Tuesday along with retail sales stats on Thursday.

As rising inflation is now linked with higher odds of a BoE rate hike (based on Forbes’ recent decision), higher inflation could increase Pound demand.

Despite this possibility, however, the Pound may end up dropping if rising inflation combined with concerns of wage growth slowdowns prove the dominant force among traders.

The week’s main Danish news will also be retail sales stats on Wednesday, along with consumer confidence figures on Thursday.

Related