UK Productivity Increases – Pound (GBP/DKK) Exchange Rate Climbs
The Pound to Danish Krone (GBP/DKK) exchange rate was trading slightly higher on Friday as investors responded to an upbeat UK labour productivity reading and news that Denmark’s industrial production saw a significant decline in February.
According to the Office for National Statistics (ONS), productivity in the UK increased by 0.7% in the final quarter of 2017, down from the previous period’s score of 0.9% and the forecast of 0.8%.
This represents surprising growth (despite missing the mark), with productivity growth in the second half of 2017 actually the strongest seen since the second half of 2005 – news that bodes well for the state of the UK’s economy.
The sharp improvement came amid a surprising drop in hours worked, somewhat limiting its impact.
Nonetheless, the news should fuel hopes that UK businesses will successfully utilise their workforce more efficiently in the future, thereby better contributing to GDP.
This news helped keep the Pound afloat, though markets are currently rather cautious in light of the imminent release of the US labour market readings.
Danish Krone (DKK) Exchange Rate Flounders as Industrial Production sees Big Decline
For the Danish Krone, markets were disappointed to see that Denmark’s industrial sector saw a notable decline in February – the first fall in five months.
According to figures from Statistics Denmark, industrial production fell by -2.2% month-on-month, down from the previous period’s rise of 1.5% and the forecast of -1.4%.
On a yearly basis, production increased by 0.5%, far below the previous period’s 6.8% surge and the forecast of 2.2%.
In other, slightly better, news yesterday’s Danish unemployment rate printed steady at 4.1% in February, whilst the GDP growth rate accelerated to 1.3% in Q4 2017.
These readings ultimately look good for the state of the Danish economy, but have failed to prevent Sterling from taking the lead against it as the week draws to a close.
BoE Rate Hike Prospects and the GBP/DKK Exchange Rate – Mark Carney Speech in the Spotlight
The Pound to Danish Krone exchange rate could see greater volatility tonight depending on the content of Bank of England (BoE) Governor Mark Carney’s speech at the International Climate Risk Conference for Supervisors in Amsterdam.
Whilst it is unlikely that he will directly discuss monetary policy, Carney could use the occasion to reveal sentiment on the state of the UK economy.
With markets currently anticipating a rate hike from the BoE in May, any comments that are deemed optimistic, or outright hawkish could give the GBP/DKK exchange rate an extra boost.