The Pound (GBP) climbed against the Danish Krone (DKK) today as the House of Lords began debating the government’s Brexit bill.
Pound Rises as Investors Optimistic Over Potential Amendments from Lords
The Pound rose on Monday as traders grew increasingly optimistic about the potential for the House of Lords to make amendments to the government’s Brexit bill.
The legislation will grant the government the authority to trigger Article 50 and begin the formal process for the leaving the EU, after the Supreme Court ruled it could not start Brexit without the consent of parliament.
While the bill has already passed through the House of Commons without amendments, investors are hopeful that the lack of a Conservative majority in the Lords will allow opposition peers to block the bill until concessions are granted.
Guaranteeing the rights of EU citizens in the UK and giving parliament the final say on the terms of Brexit are expected to be two of the most likely amendments tabled by peers, with Lib Dem peer Dick Newby confident that the House will not give the bill a free pass, despite calls not to ‘frustrate’ the process.
However with the House of Lords historically reluctant to go against the grain and directly defy a vote in the Commons it may not result in the outcome investors hope for, likely weighing on Sterling sentiment.
Greek Economic Woes Weigh on Danish Krone
The Danish Krone’s position pegged to the Euro (EUR) caused it to tumble along with the single currency for much of Monday as Eurozone Finance Ministers met to discuss the situation in Greece.
The meeting renewed the focus on the Eurozone’s weakest link, with investors still fearing the possibility of a ‘Grexit’ as the Greek government and the European Stability Mechanism (ESM) remained in a deadlock over the release of further funds.
Greek Prime Minister Alexis Tsipras has previously rejected calls by Greece’s creditors to implement further austerity measures as he argued that the people of Greece have suffered enough.
However the Krone saw a slight uptick towards the end of the day as the Eurozone ministers came to an agreement that would see Greece and its creditors return to the negotiation table, possibly preventing the Greek Government from defaulting on a €7bn debt repayment in July.
GBP DKK Forecast: UK Public Sector Borrowing Report Ahead
The Pound Danish Krone exchange rate may continue rising on Tuesday following the release of the UK’s latest Public Sector Borrowing figures. Economists expect that the UK government will report a £14.4bn surplus in January after printing a £6.42bn deficit the month before as it is buoyed by a rise in income tax revenue at the start of the year.
Meanwhile, a lull in domestic data may hamper the Danish Krone’s advance this week, with the only notable data being the latest Retail Sales figures at the end of the week.