Pound Sterling Danish Krone Exchange Rate (GBP/DKK) Dips on Brexit Warning

Higher Risk of No-Deal Brexit Causes GBP/DKK Exchange Rate Losses

Pound Sterling (GBP) has seen a minor loss against the Danish Krone (DKK) today, hitting an interbank exchange rate of DKK8.38.

This deterioration comes from signs that a no-deal Brexit could be back on the table, depending on how MPs respond to Prime Minister Theresa May’s ‘Chequers plan’.

The PM has stated that if the Chequers proposal is rejected then the only alternative will be for a no-deal Brexit – this has significantly raised the pressure to secure a workable Brexit agreement.

Danish Krone to Pound Exchange Rate Rises on US Dollar Decline

Danish Krone (DKK) traders have seen better conditions today, with the Krone advancing against the Pound (GBP) due to global trade developments.

Another escalation in the US-China trade war has lowered demand for the US Dollar, which has made the Euro-tied Danish Krone more appealing to traders.

The Krone is pegged to the Euro, so if the single currency rises then the Danish Krone will also see some noticeable appreciation.

Weekly GBP/DKK Forecast: Will Pound to Krone Exchange Rate Drop on UK Inflation Slowdown?

There could be more difficulties in the GBP/DKK exchange rate as the week progresses, with Wednesday’s August UK inflation rate data expected to reveal a year-on-year slowdown.

A forecast-matching year-on-year dip from 2.5% to 2.4% might seem small on paper, but it could still devalue the Pound because it would reduce the odds of a 2019 Bank of England (BoE) interest rate hike.

Even if the month-on-month reading rises from 0% to 0.5% as forecast, the Pound might not be supported as traders usually focus on the year-on-year results.

Another factor that risks weakening the Pound will be Thursday’s retail sales figures for August, with the numbers are expected to show slowing levels of sales activity across the board.

The one saving grace for GBP traders could be Thursday’s EU summit on Brexit: if EU leaders suggest that talks could be concluded in the near-future then the Pound could stage a recovery.

For Danish Krone traders, this week will be comparatively quieter with the only domestic data being Thursday’s consumer confidence reading for September.

An increase from 7.8 points to 9.2 in consumer sentiment levels could boost the DKK/GBP exchange rate, especially as UK data out on the same day threatens to weaken Sterling.

Adam Solomon

Adam joined the team at TorFX soon after graduating from University in 2005 with a degree in Journalism. Since then Adam has advanced to become both Head of Trading and Head of Treasury. His keen interest in the currency market and knowledge of what drives exchange rates makes him perfectly positioned to produce regular market updates focused on the movements of the major currencies.

Contact Adam Solomon


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