The Danish Krone made gains against the Pound Sterling and was trading steadily against the Euro as market attention focused on high stakes Euro group negotiations over Greece’s financial programme.
A lack of market moving economic data from the UK and the closure of the US and Canadian markets for national holidays led to a relatively muted trading session. Despite that, the Danish Krone followed the Euro higher against the Pound after a report showed that the Eurozone’s trade surplus soared to a record high in the final month of last year.
The data released by Eurostat showed that the 19-member currency bloc’s trade surplus soared to €23.3 billion. November’s seasonally adjusted figure was also revised higher from €20 billion to €21.6 billion. Economists had been expecting a figure of €20.5 billion.
The main cause for the sharp rise in the surplus was the softening of the Euro, which allowed exports to grow at a steady pace.
In December, the region’s exports increased by 8% from the same period last year. Falling energy prices due to the decline in the value of oil was also a major contributor to the wider surplus.
The GBP/DKK currency pair fluctuated between 10.0710 and 10.0180 as the Eurogroup gathered in Brussels.
Over the course of 2014, the Eurozone trade surplus reached a massive €194.8 billion. The figure was a sharp 27% rise from the previous figure of €152.3 billion. The huge figure has been dubbed the ‘Euroglut’ by economists. Some economists are warning that the huge surplus could prove to be damaging to the Eurozone as it keeps the single currency stronger due to increased Euro buying by foreigners.
Eurogroup Finance Ministers gathered in Brussels in an attempt to reach an agreement on the Greek debt situation. Hopes for a breakthrough supported the Euro and other closely linked currencies such as the Danish Krone.
The prospect of a deal being reached on Monday is slim, as both sides appear to be trying to call the others bluff. The new Syriza led Greek government appears to be betting that the European Finance Ministers will give in to their demands and allow them to end austerity measures in order to save the Eurozone. On the other hand, the Euro Group is betting that Greece will back down as the February 26 deadline approaches and that it will do what it asks to stay in the Eurozone.
Looking ahead to the rest of the week the Pound is forecast to experience volatility from the release of UK inflation and unemployment data.
The minutes of the Bank of England’s February policy meeting will also be released. The end of the week will see the publication of UK Retail Sales, which could see an increase to falling prices spurring on consumer spending.
Data out of Denmark this week includes Consumer Confidence on Thursday and retail sales on Friday.
The Pound Sterling to Danish Krone (GBP/DKK) exchange rate was trading in the region of 10.0290 on Monday.