The Pound has been trading in a tight range against the Danish Krone of late, with the overall pattern of the week being one of decline. For the most part, Sterling has been repeatedly shaken by the latest developments of the EU Referendum, many of which have resulted in a sharp decline in the Pound’s appeal.
The Krone has been more positive overall against the Pound, with the latest domestic data generating a largely upbeat attitude among investors.
Pound Sterling Low across the Board on Falling PMI and Chaotic Referendum Polling Situation
The latest movements for the Pound have been minimal, against the Danish Krone and in most of Sterling’s other exchange rate pairings.
One of the most notable shifts in the value of the Pound came at the start of the week when an EU Referendum poll put over 50% of the possible vote with the ‘Leave’ side. This was a major shock for investors and economists alike due to the fact that previous polls had consistently pointed towards a ‘Remain’ vote being the more likely outcome.
The damage continued on Wednesday, when the OECD estimated that ‘Brexit’ would be a major negative shock to the UK and additionally forecast lower national growth.
The Pound had briefly advanced earlier in the day when the manufacturing PMI for May rose out of the contraction range, although the 50.1 figure was scarcely high enough to reassure investors.
More recently, the construction PMI for the same month has dropped and now teeters on the edge of contraction at 51.2 points.
The latest EU Referendum polls appear to have put both sides on a level pegging, although this is only the report of YouGov, one of many polling organisations.
Danish Krone Movement Dictated by Market Concerns and Mixed National Ecostats
The latest shifts for the Danish Krone against the Pound have been broadly positive, in spite of a not entirely consistent offering of domestic data of late.
On the positive side, Tuesday’s preliminary GDP growth rate for Q1 rose on the quarter and the year, while the unemployment rate for April (which was also announced on Tuesday) remained at 4.3% instead of rising.
Less supportively, business confidence in May fell further into a negative range, as did the manufacturing PMI for May. Forecasts had actually been for the unemployment rate to drop by -0.1%.
Future GBP/DKK Exchange Rate Forecast
For the remainder of the current week, Pound Sterling/Danish Krone (GBP/DKK) exchange rate movement may occur as a result of tomorrow’s UK composite and services PMIs for May, which are both forecast to rise.
The services outcome will likely receive a large amount of attention, due to the fact that the sector in question is widely considered to be the most important of all the UK’s contributing economic areas.
Looking ahead, the next Danish announcements aren’t due until Tuesday, when the national industrial production results for April will be released; these have been predicted to rise out of negative ranges.
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