Although the Pound staged something of a rebound on Thursday, the British currency has been generally sliding against peers (including the Danish Krone) this week.
The Krone, meanwhile, has experienced limited movement on the whole with a shortage of domestic data leaving Eurozone concerns as a primary influencer on the Scandinavian currency.
Over the present week, the GBP/DKK currency pair fell from a high of 8.9049 to a low of 8.6438.
Pound Rocked by BoE Cautions and Collapse in UK Confidence
Sterling has been through the mill this week, having been sent plummeting by poor PMI results, a Bank of England (BoE) warning and a number of highly disappointing production stats for May.
The construction, composite and services PMIs for June showed declines across the board. In the case of construction, the result was particularly bad, with the run up to the EU Referendum vote showing a fall into the contraction range from 51.2 to 46.
BoE Governor Mark Carney did little to calm investors in the Pound, with a well-intentioned speech about being cautious in the wake of the Referendum result seeing the Pound drop off sharply across the board.
The latest blow to Sterling has come from the UK’s industrial and manufacturing production results on the month and the year in May; in all fields bar annual manufacturing, a drop off was recorded.
Danish Krone Influenced by Eurozone Fears and Varied Production Reports
The Krone has mostly been rudderless this week, having received the most input from the pegged Euro.
Actual domestic data for Denmark has been limited to the May industrial production stats, which have seen a major rise on the year but a dip on the month.
Although it was not rocked by as many domestic data disappointments, the Eurozone (and the Krone by extension) was still held back by the long-term worries of the European Central Bank (ECB).
A report published on Thursday showed that the ECB was still in the dark about just how big an impact the then-theoretical ‘Brexit’ would have on the UK and the wider European area.
GBP/DKK Exchange Rate Forecast
For the remainder of the current week, Pound Sterling/Danish Krone exchange rate movement may occur as a result of tomorrow’s UK trade balance stats for May, which have been forecast to show a clear expansion of the current deficit.
Looking further ahead, the coming week will bring the BoE interest rate decision, as well as the UK construction output result for May.
From Denmark, next week will bring trade and inflation data on Monday and consumer confidence stats on Friday.
The big UK news of next week is the BoE’s interest rate decision. For the first time in years, a number of economists are forecasting a rate change decision to take place, in the form of a cut from 0.50% to 0%. While forecasters were previously looking forward to a rate hike, this outcome seems improbable given the already notable effects of ‘Brexit’. Should the BoE cut the rate, the Pound is likely to experience some significant volatility.
For the UK’s construction output result, a decline of -0.68% is forecast.
Regarding Denmark, the May trade balance and June annual inflation rate are forecast to fall and rise respectively, while July’s consumer confidence result on Friday has a dip from 4.4 to 4.24 on the cards.
Keep up to date w
i
th the latest from TorFX at:
facebook.com/torfx