The Danish Krone gained against a broadly softening Pound Sterling on Tuesday, with the GBP/DKK exchange rate losing 0.25% over the course of the European session to trade in the region of 10.1600.
The Pound’s downtrend against the Krone was largely due to the UK’s below-forecast inflation data for February.
The fact that the UK’s non-core consumer price index fell to 0.0% on the year (the first zero reading since official records began in 1989) saw investors push Bank of England (BoE) rate hike projections further into 2016 and widely undermined demand for Sterling.
Meanwhile, the US Dollar to Danish Krone (USD/DKK) currency pair was also trending in a slightly softer position in spite of the ‘Greenback’ rallying as a result of above-forecast domestic inflation and manufacturing figures.
The USD/DKK exchange rate moved from the day’s high of 6.8386 to trade in the region of 6.7937 as Tuesday continued.
The US Dollar had gained on peers like the Euro and Pound after the annual non-core US Consumer Price Index improved from -0.1% to 0.0% in February.
Markit’s US Manufacturing PMI also moved further above the 50 mark separating growth from contraction.
The Krone was deriving support from Monday’s encouraging Danish data and the belief that stability could return to one of Denmark’s largest trading partners when Greece reaches an agreement with its creditors.
The morning’s better-than-expected Manufacturing/Services PMIs for Germany and the Eurozone were also Danish Krone-supportive.
Monday’s Danish Consumer Confidence report showed a marked increase in sentiment in March. The measure advanced from 9.1 in February to 13.9, defying expectations for a decline to 7.7.
Danish reports are lacking over the rest of the week, leaving further Krone movements up to global economic developments, such as progress in the Greek bailout negotiations, US data and commodity price shifts.
Next week there are several potentially influential domestic reports to focus on, starting with Monday’s Business Confidence Index for March. A slight increase from -13 to -12 has been projected. This data will be followed by Denmark’s final fourth quarter growth numbers on Tuesday. It is believed that the nation will post quarter-on-quarter growth of 0.4% and an annual rate of expansion of 1.3%.
Tuesday also sees the release of Denmark’s unemployment number for February. Economists have predicted that the level of joblessness eased from 4.9% in January to 4.1%.
Further Danish Krone movement could be caused by US data, as more positive ecostats from the world’s largest economy will up the odds of a summer interest rate hike from the Fed. Developments in negotiations between Greece and its creditors will also impact demand for the European assets, as will notable commodity price movements.