Pound to Danish Krone (GBP/DKK) Exchange Rate Holds Near Best Levels as Eurozone Data Continues to Disappoint
Despite a lack of fresh demand for the Pound (GBP) amid persistent uncertainties over UK politics and Brexit, the Pound Sterling to Danish Krone (GBP/DKK) exchange rate has sustained gains over the past week mainly due to weakness in the Euro (EUR).
As the Danish Krone (DKK) is pegged to the Euro (EUR), GBP/DKK’s gains last week came as the Krone fell in line with the Euro’s falls.
After opening last week at the interbank level of 8.62kr, GBP/DKK saw solid gains and closed the week higher despite a mid-week dip to a monthly low of 8.60kr.
This morning, GBP/DKK has continued to climb with an upside bias and trended relatively closely to its best levels in two weeks.
Sterling’s appeal is limited due to lingering Brexit uncertainties, but it has been able to hold near its highs versus the Euro-pegged Krone as this morning saw the publication of yet more weak Eurozone data.
Pound (GBP) Exchange Rate Gains Limited as Investors Hesitant to Back UK Currency
While the Pound (GBP) remains more appealing than a slowdown-battered Euro (EUR) and Danish Krone (DKK), the British currency’s potential for further gains has been limited.
This is because investors still do not expect to see any notably optimistic developments in UK political developments or Brexit any time soon.
In fact, with the likelihood of Britain taking part in EU elections next month rising, and the government’s negotiations with the opposition Labour Party reportedly stalling, there are notable downside risks in Sterling.
Until there are some more notable developments, the Pound’s volatility remains low and investors will be hesitant to move on the currency much compared to rivals.
Danish Krone (DKK) Exchange Rate Recovery Weighed by Weak Eurozone Confidence Data
Eurozone data continues to indicate that the Eurozone’s economic activity is unlikely to have recovered from months of slowdown.
As a result, the Euro (EUR) has put in a poor performance in recent weeks, which has of course meant the same weakness for the Euro-pegged Danish Krone (DKK).
Monday saw the publication of the latest round of disappointing Eurozone stats, with Eurozone business confidence falling short of expectations and printing at 0.42. Denmark’s own business confidence report from April fell short of forecasts as well.
Other factors that fell short included Eurozone economic sentiment and industrial sentiment, although the services sentiment report did beat expectations with a result of 11.5.
Still, the Danish Krone’s losses were limited, as market hopes that political tensions in Spain could lessen following a strong showing from the ruling socialist PSOE Party in weekend elections, which kept the Euro from falling too far.
Pound to Danish Krone (GBP/DKK) Exchange Rate Traders Anticipate Slew of Eurozone Data
The Pound to Danish Krone (GBP/DKK) exchange rate’s movement is mixed due to a lack of surprising data of late, and investors are now turning their attention towards major Eurozone data due for publication in the coming sessions.
Tuesday’s session could be one of the more influential this week, as several major Eurozone ecostats will be published that could influence the Euro (EUR) and Danish Krone (DKK) outlooks if they surprise investors.
Data to watch out for include German consumer confidence, unemployment and inflation, as well as French growth and inflation stats, and Eurozone unemployment and growth figures.
Even more influential data will come in towards the end of the week, including Markit’s April manufacturing PMIs and the Eurozone’s overall April inflation projections.
Pound (GBP) investors are likely to focus on potential Brexit developments this week, but any surprising UK PMIs or Bank of England developments could also influence Pound to Danish Krone (GBP/DKK) exchange rate movement.