The Pound to Danish Krone exchange rate trended a little lower on Thursday morning, halting its attempts to reach last week’s levels. A lack of supportive UK data limited recovery attempts to 8.65 GBP DKK, and on Thursday morning the pair slipped to around 8.6350.
Pound (GBP) Loses Ground after Disappointing Mortgage Approvals
Sterling has been attempting to recover from near its worst post-Referendum levels for most of this week, but while the currency has been appealing because of its comparative cheapness, it has thus far failed to stage an impressive rebound.
Investors hoped that Thursday’s session would offer support for a GBP recovery rally, with the week’s first influential UK datasets being published in the morning.
However, while August’s consumer credit results impressed with a score of 1.6b, August’s mortgage approvals report counteracted the report’s potential positive impact, printing at a 21-month-low of 60.058.
As a result of this and bets that the Bank of England (BoE) will introduce further monetary easing in coming months, Sterling trended weakly on Thursday morning and edged back towards its lows.
Danish Krone (DKK) Strengthens as Eurozone Confidence Improves
With the Danish Krone still pegged to the Euro (EUR), the Krone was able to benefit from Thursday’s news that Eurozone confidence had come in above expectations in September.
Eurozone economic confidence improved from 103.5 to 104.9, the business climate indicator jumped from 0.02 to 0.45, and the contraction in industrial confidence lightened from -4.4 to -1.7.
These figures all beat forecasts, giving the Euro (and by extension the Danish Krone) a slight boost in demand on Thursday morning.
Thursday’s Denmark data did little to influence Krone or Euro exchange rates. While business confidence plunged to -8 in September and unemployment printed at a worse-than-expected 4.3% in August, the Krone was boosted by Eurozone news.
GBP/DKK Exchange Rate Forecast to Hold Ground if UK Growth Meets Projections
Friday’s session will see the publication of Britain’s final Q2 Gross Domestic Product (GDP) results, which are expected to meet projections of 0.6% quarter-on-quarter and 2.2% year-on-year.
If scores meet expectations, it could offer the Pound firmer ground to trade on – and beating expectations would surely offer a solid opportunity for a more sustained recovery rally. However, underwhelming growth scores could undermine all of Sterling’s recovery attempts.
The Danish Krone is, of course, unlikely to be influenced heavily by Denmark’s own Q2 growth figures on Friday (expected to hit 0.4% QoQ and 0.5% YoY) due to its Euro peg.
Instead, the Krone could be influenced by Friday’s German retail sales figures, or August’s Eurozone unemployment rate (which is expected to improve to 10%). Preliminary Eurozone inflation figures for September could also strengthen the Krone if they impress .
At the time of writing, the Pound to Danish Krone exchange rate traded at around 8.6350, while the Danish Krone to Pound exchange rate trended in the region of 0.1158.