The Pound Danish Krone (GBP DKK) exchange rate fluctuated today as markets speculated over the outcome of Prime Minister Theresa May’s meeting with EU leaders at a European summit in Brussels.
Pound (GBP) Fluctuates as May Prepares to Address EU Leaders
The Pound struggled ahead of the European summit in which Theresa May is set to address EU leaders for the first time since the General Election.
May is expected to use her address to outline her plans over the post-Brexit rights of expats, which remains a top priority for EU officials to resolve before talks can move on and the two sides can discuss the possibility of a new UK-EU trade deal.
However, following the Conservative’s disastrous performance in the general election and the loss of the government’s majority, investors remain concerned that May’s position in talks will have been greatly undermined.
Meanwhile, European Council president Donald Tusk has indicated that the UK’s exit from the EU may still be preventable, suggesting that the door is still open for Britain to remain part of the Union.
Speaking ahead of the summit Tusk said;
‘Some of my British friends have even asked me whether Brexit could be reversed and whether I could imagine an outcome where the UK stays part of the EU.’
‘I told them that, in fact, the European Union was built on dreams that seemed impossible to achieve. So, who knows? You may say I’m a dreamer, but I’m not the only one.’
While markets are unlikely to take much notice of Mr Tusk’s comments, the slim chance that the UK could still remain part of the EU is likely to lift the hopes of some of the more optimistic investors.
Danish (DKK) Krone Strengthened by Upbeat ECB Economic Bulletin
Similarly to its June monetary policy meeting, the ECB presented an upbeat outlook for the Eurozone’s economic future as it said that the continued rise in economic data from the bloc signals that the Eurozone is likely to continue to witness strong economic growth in the second quarter.
However, sure to disappoint some investors is the Bank’s continued commitment to its ultra-loose monetary policy. The institution said that ‘low interest rates will continue to promote a recovery in investment’, adding additional evidence to suggestions that the ECB will leave interest rates on hold for the foreseeable future.
GBP DKK Forecast: Eurozone PMIs Ahead
The GBP DKK exchange rate is likely to come under increased pressure at the end of this week’s session as the Eurozone Manufacturing and Services PMI flashes for June are both expected to continue expanding, achieving their fastest pace of growth since the Eurozone debt crisis.
Looking slightly further ahead the Pound is likely to cede ground at the start of next week with the release of the UK’s latest Consumer Confidence report, with analysts forecasting that the political uncertainty following the election and its impact on Brexit will negative effect household sentiment.