Pound Danish Krone (GBP/DKK) Exchange Rate Rallies on Soft Brexit Optimism
This morning the Pound Sterling Danish Krone (GBP/DKK) exchange rate jumped by 0.7% as reports circulated that there could be a delay to the UK’s departure from the European Union.
The pairing is currently trading at an inter-bank rate of Kr 8.67.
The Pound rose on hopes that a no-deal Brexit will be avoided, and commenting on this, Craig Erlam of OANDA said:
‘The Pound is tearing higher on Tuesday as we await another vote in Parliament tomorrow – albeit not on May’s deal, again. The decision comes as the opposition Labour Party threw its support behind a second referendum if it couldn’t get its own Brexit deal over the line and Theresa May opened the door to an extension , having failed to secure amendments with the EU in time for tomorrow’s vote.’
Meanwhile, Governor of the Bank of England (BoE), Mark Carney, said that a Brexit extension is not as good as a deal when questioned during the inflation report hearings.
Carney stated:
‘There’s a big difference between an extension of Article 50, even a long extension, and an agreement with a transition to a known end stage.
‘Wherever we’re headed it would serve the economy well to have a transition period to that new world, so that people knew soon where they’re headed, businesses could reorganise their affairs and get ready for this new world, and government could finish its tasks.’
Danish Krone (DKK) Slides despite Rise in Retail Sales
This week’s session opened with January’s annual retail sales for Denmark, which saw sales rise 0.1%.
This did not offset the previous month’s fall in retail sales by 0.3%, and the Pound Sterling Danish Krone (GBP/DKK) exchange rate slipped slightly, before rising and falling throughout the afternoon.
However, this did little to stop Brexit optimism from buoying Sterling.
Pound (GBP) Rallies despite PM’s Opposition to Extending Article 50
Sterling has rallied over the course of today following comments yesterday from the Prime Minister that indicated an extension to Article 50 was not a possibility.
During a summit in Sharm El-Sheikh, Egypt, Theresa May reiterated her opposition to delaying the UK’s withdrawal from the European Union stating:
‘An extension to Article 50, a delay in this process, doesn’t deliver a decision in Parliament, it doesn’t deliver a deal. All it does is precisely what the word ‘delay’ says. Any extension of Article 50 isn’t addressing the issues.’
GBP/DKK Outlook: Will Further Brexit Optimism Buoy Sterling?
Brexit is likely to remain the main catalyst for movement in the Pound Sterling Danish Krone (GBP/DKK) exchange rate.
Sentiment in the Pound could rise if the possibility of the UK exiting the European Union with a deal increases, or if there is an Article 50 extension.
UK Prime Minister Theresa May is due to give a speech this afternoon, which will be watched closely to see whether or not she continues to refuse to rule out a no-deal Brexit.
It is likely that there will be further movement in the pairing on Thursday there will be a couple of Danish data releases, such as January’s unemployment rate and GDP for Q4.
DKK could see an upswing of support following the release of Q4 GDP as the forecast suggests growth of 0.8%, the highest preliminary increase in a year.