A number of factors contributed to an upswing in the Pound Sterling to Danish Krone (GBP/DKK) exchange rate last week, with the pairing steadily climbing from a low of 10.2227 to a high of 10.3503 before the weekend.
Demand for the Krone was undermined last week as Denmark’s unemployment rate was shown to have increased from 4% to 4.9% in January, rather than holding steady as economists projected.
Further Krone declines were recorded after a report revealed that the level of industrial production in Denmark unexpectedly dipped by -1.9% on the month and 1.18% on the year in January. Respective increases of 0.46% and 2.8% had been anticipated.
Meanwhile, Sterling remained trading in a stronger position against a number of its peers thanks to above-forecast Manufacturing and Construction Purchasing Managers’ indexes for the UK.
The positive British ecostats supported the case in favour of the Bank of England introducing an interest rate increase before the end of 2015 and helped Sterling advance on a number of its rivals.
The GBP/DKK pairing has since extended gains, jumping to 10.4440 in reaction to Denmark’s inflation report.
According to figures compiled by Statistics Denmark, consumer prices were down 0.1% on the year in January following the 0.3% increase recorded at the end of 2014.
The monthly decline in consumer price inflation was the first recorded since 1954 and was largely due to softer oil prices.
The Pound Sterling to Danish Krone (GBP/DKK) exchange rate advanced by 0.5% in the hours after the report’s publication and the pairing briefly struck 10.4600 before the close of trading.
Economist Jan Størup Nielsen said of the result; ‘It is worth underscoring that the current situation is good news for the Danish economy. As long as lower inflation is due to falling energy prices and fees it is helping to support the purchasing power of Danish households.’
Further Danish Krone exchange rate movement could occur tomorrow after Denmark releases its current account and trade balance figures.
Both the nation’s current account and trade surpluses are believed to have widened in January.
Global economic developments, such as the ongoing Greek debt negotiations and Federal Reserve rate hike speculation, may also impact Krone trading before the weekend.
During the European session the Pound Sterling to Danish Krone (GBP/DKK) exchange rate was trading in the region of 10.4520.
The US Dollar to Danish Krone (USD/DKK) exchange rate was trading in the region of 6.9374, up from the day’s low of 6.8637.