GBP/DKK Exchange Rate Falls on Rising BoE Rate Cut Odds
The Pound to Danish Krone (GBP/DKK) exchange rate fell by -0.2% this morning, with the pairing currently trading around 8.837kr as British ministers prepare for a surge of coronavirus cases in the UK.
Health Secretary Matt Hancock cautioned: ‘Overreaction has its costs too, economic and social, and so we have to keep the public safe, but we also need to act in a way that’s proportionate.’
Sterling has also struggled on renewed speculation over March’s Budget, with the recent outbreak of UK coronavirus cases being perceived as increasing the odds of a rate cut from the Bank of England (BoE) in the near-term.
Neil Jones, an analyst at Mizuho Bank, commented:
‘My sense is the market is pulling back on [the Pound] long positions originally destined to run into an upbeat expansionary fiscal stance in next month’s budget. However, latest reports suggest measures may well be delayed into the autumn.’
Brexit uncertainty continues to restrain the Pound, with investors awaiting the Government’s publication of its strategy for post-Brexit trade talks.
However, after Prime Minister Boris Johnson declared that he would be ready to walk away from the EU without a trade deal, the GBP/DKK exchange rate has remained under pressure today.
GBP investors will be awaiting today’s speech from Sir Jon Cunliffe, the Deputy Governor for Financial Stability and the BoE. Any downbeat comments about the British economy would prove Pound-negative.
DKK/GBP Exchange Rate Rises Despite Weak Danish Industrial Outlook
The Danish Krone (DKK) edged higher in spite of a weak Danish industrial outlook report for February, which fell by -4.
With Denmark’s economy being particularly reliant on trade and manufacturing, some Danish Krone investors are feeling jittery over the poor outlook for the industrial sector. The coronavirus outbreak is also raising concern that the Danish economy could also suffer from the Covid-19’s negative impact on the global supply chain.
The DKK/GBP exchange rate has benefited from a weaker Pound (GBP) today. However, with the Danish Krone’s close relationship to the Euro, we could see DKK begin to tumble on rising fears of a recession for the Germany economy going forward.
Danish Krone (DKK) traders will be focusing on the Danish economy’s resilience in the weeks ahead as the coronavirus threatens to derail the global economy.
GBP/DKK Outlook: Could Sterling Continue To Fall on Weak UK Consumer Confidence?
The Danish Krone (DKK) investors will be looking ahead to tomorrow’s flash Danish GDP report for the fourth quarter. Any signs of improvement for the Danish economy in the final quarter of 2019 would provide a boost for the GBP/DKK exchange rate.
Pound (GBP) traders will be awaiting tomorrow’s publication of February’s UK GfK consumer confidence report. As the figure is expected to remain subdued at -8, however, we could see the GBP/DKK exchange rate continue to sink on heightened concerns for the British economy.
Brexit and coronavirus developments will also continue to steer the direction of the Pound this week.