The Pound Sterling to Danish Krone (GBP/DKK) exchange rate was trending within the range of 10.3386 to 10.5671 over the past week. The Pound was generally weak against the Krone as a result of uncertainty regarding the possible impact of a Greek exit on the UK. Expectations of a delay to a Bank of England (BoE) interest rate hike have also weighed on demand for the British Pound over the past week. From a Danish standpoint, the domestic currency softened versus many of its peers after the central bank opted to buy in a significant amount of Danish Krone in order to devalue the currency.
The Danish Nationalbank has intensified its intervention in the foreign exchange market over the past week, having purchased around 33.5 billion Danish Krone in June. This was evidenced by Danish Foreign Reserves, which tanked last month. The relatively large scale intervention has stoked speculation that the central bank will avoid cutting the cash rate for the remainder of 2015, however. Many analysts expect Denmark’s Nationalbank to continue gradually reducing foreign reserves to a level of around DKK 400-500 billion; equivalent to approximately one quarter of gross domestic product.
The Pound Sterling to Danish Krone (GBP/DKK) exchange rate was trending in the region of 10.3980 during Thursday’s European session.
Danish economic data produced mixed results erring towards positivity on Thursday. May’s Balance of Trade saw the surplus advance from 7.5 billion to 7.8 billion, although missing the median market forecast 8.1 billion. In addition, May’s Current Account surplus advanced from 3.9 billion to 16.2 billion despite predictions of a fall to just 3.3 billion. Meanwhile, Thursday’s British data also printed positively. The Pound rallied after the RICS House Price Balance came in at 40%, eclipsing expectations of a rise from 34% to 36%.The Bank of England (BoE) interest rate decision has the potential to provoke changes for the GBP/DKK exchange rate, although most analysts expect the British central bank to hold the cash rate until more is known regarding Greece’s future as a member of the currency bloc.
Looking ahead, Friday’s Danish Inflation Rate data will be of significance. June’s inflation is forecast to edge higher from 0.6% to 0.62%. The coming week is completely devoid of Danish economic data so much of the Krone’s movement will be subject to market sentiment and geopolitical developments in Europe. In terms of British data over the coming week, the Consumer Price Index and employment figures will be in focus.
The Pound Sterling to Danish Krone (GBP/DKK) exchange rate was trending in the range of 10.3300 to 10.4090 during Thursday’s European session.