GBP/DKK Exchange Rate Flat as Danish Retail Sales Fall
The Pound Danish Krone (GBP/DKK) exchange rate steadied today and is currently trading around 8.3340Kr on the interbank market.
The Danish Krone (DKK) held steady against the Pound (GBP) despite poor annual Danish retail sales for May, with sales growth falling -0.7.
This is the second month straight that retail sales have decreased in Denmark, and this is proving increasingly worrisome for Danish markets.
Political news has also remained in focus, with the Social Democrat leader Mette Frederiksen due to become Denmark’s youngest prime minister, after agreeing to form a one-party minority government with three other leftist parties.
Mrs Fredriksen said:
‘It is with great pleasure I can announce we have a majority to form a new government. Now we have reached the goal … we have shown that when Danes vote as they have done, a new majority can turn their hopes into actions.’
GBP/DKK Exchange Rate Rangebound despite Returning Brexit Jitters
The Pound (GBP), meanwhile, has remained subdued against many of its competitors.
This came following comments from the former Brexit Secretary, Dominick Raab, who said that current Tory leadership favourite Boris Johnson would likely ignore efforts to block a no-deal Brexit.
Rory Stewart, Secretary of State for International Development and a former leadership contender, commented:
‘Boris is pretending that he has a magic solution where he can take people out [of the EU without a deal] and is not going to damage them at all, and it’s going to be terrific… [The] reality is that he can’t do it and he’s going to let people down.’
Today also saw Mark Carney, the Governor of the Bank of England (BoE), warn that a no-deal Brexit would force the bank to make interest rate cuts.
Mr Carney said:
‘The path of interest rates, in the markets judgment, is lower because they are ascribing some possibility to no-deal. And in the event of no-deal, that interest rates would be lower than they otherwise would be.’
Meanwhile UK BBA Mortgage Approvals for May eased from the previous month’s 42.898k to 42.384k.
These failed to boost the GBP/DKK exchange rate, however, despite approvals hitting a three-year high.
GBP/DKK Forecast: Sterling Could Sink on Increased No-Deal Fears
Danish Krone (DKK) traders will be looking ahead tomorrow’s publication of the industrial outlook figures for June.
Any signs of improvement could provide some uplift for DKK.
DKK investors, however, are remaining cautious with its main trading partners throughout Europe facing increasing risks of economic slowdown.
A mixture of global trade headwinds and mounting fears that the UK is heading for a disorderly Brexit is leaving many Danish Krone (DKK) traders feeling jittery.
Sterling (GBP) investors, meanwhile, will be focusing on political developments tomorrow as the Tory leadership race heats up surrounding the issue of Brexit.
However, we could see the GBP/DKK exchange rate begin to slip on further indications that Boris Johnson would likely push the UK into a chaotic departure from the European Union.