GBP/DKK Exchange Rate: Nervous Pause as Pairing Awaits Brexit News
The Pound Danish Krone (GBP/DKK) exchange rate is muted this morning as investors await the UK’s ‘fresh solution’ to a hard border in Ireland.
At the time of writing GBP/DKK is trading in a narrow range at the start of today’s session, with the pairing having recouped the remainder of Tuesday’s losses overnight.
Pound (GBP) Steady as Markets Anticipate Possible Irish Border Solution
The Pound is on a steady footing this morning following reports the UK government is preparing to publish plans to resolve the post-Brexit Irish border issue.
According to sources quoted in The Times, Irish officials have been told to expect new plans for the post-Brexit border in Ireland ‘imminently’.
These sources are reported to have said:
‘Officials have been promised concrete details on what alternative plans the UK government has, beyond the so-called backstop plan.’
The issue of the Irish border has been one of the largest roadblocks in Brexit negotiations, so investors have welcomed suggestions that the UK and EU are making positive progress.
This has helped the GBP exchange rate to stabilise this morning on hopes that it will help the second stage of Brexit talks proceed at a more brisk pace.
However Sterling’s gains from the news were limited as analysts warn that there are still significant other hurdles that must be overcome to ensure a ‘smooth and orderly Brexit’.
Danish Krone’s (DKK) Stable as Eurozone Expansion Expected to Remain Robust
Meanwhile as the Danish Krone’s value is pegged to the Euro (EUR), the currency is trading robustly against the Pound this morning on expectations that the Eurozone will continue to enjoy steady economic growth in 2018.
According to a new report published by S&P Global Ratings, economists at the agency forecast that a revival of global trade has helped to lift the Eurozone’s economic prospects.
However the analysts also suggest that after the sturdy growth of 2017, the expansion of the Eurozone is likely to level off this year, with GDP for 2018 and 2019 expected to slow to 2.3% and 1.9% respectively.
Economists at S&P Global Ratings said:
‘The current growth cycle appears to have peaked, but the remaining slack in the labour market and productivity rebound will keep inflationary pressures in check until the end of 2019.’
GBP/DKK Exchange Rate Forecast: UK GDP Figures to Leave Sterling Subdued?
Looking ahead the GBP/DKK exchange rate may struggle to push higher on Thursday as the UK publishes its final GDP reading for the fourth quarter.
Tomorrow’s data is forecast to confirm that UK economic growth slowed from 0.5% to 0.4% in the last three months of 2017.
With the data expected to fall in-line with previous estimates, the outcome will likely have already been priced in by investors, limiting any potential for the Pound to trend higher.
Meanwhile the Euro and consequently the Danish Krone may strengthen on Thursday with the release of Germany’s latest CPI figures, with analysts forecasting that German inflation will have climbed from 1.4% to 1.7% in March.