Pound Danish Krone (GBP/DKK) Exchange Rate Steady, UK Retail Sales Shrink in February

GBP/DKK Exchange Rate Rangebound, UK Coronavirus Developments in Focus

The Pound Danish Krone (GBP/DKK) exchange rate held steady this morning, with the pairing currently fluctuating around 8.570Kr after the UK’s British Retail Consortium’s (BRC) Retail Sales report for February fell below consensus from 0% to -0.4%.

BRC Chief Executive Helen Dickinson was downbeat in her analysis, commenting:

‘Clouds continued to hang over the retail industry in February, as storm Ciara, Dennis and Jorge took their toll on retail sales, particularly in fashion. Despite many indicators suggesting a rise in confidence among UK shoppers in recent months, this has failed to translate into higher retail sales. However, the end of the month saw a slight rise in spending on food and healthcare as a result of concerns around coronavirus.’

Sterling continues to remain subdued against many of its peers due to rising fears over the spread of the coronavirus (Covid-19). Additionally, many experts are now warning that European countries, including the UK, could face an Italian-style lockdown.

Charles Dumas, Chief Economist at TS Lombard, said:

‘Global spread of the Covid-19 virus looks likely to cause a worldwide recession and bear market in stocks. Nobody knows how serious the disease is likely to be.’

The GBP/DKK exchange rate is likely to remain under pressure today as investors remain anxious over the possibility of a coronavirus-related global economic slowdown.

Danish Krone (DKK) Stabilises as Danish Inflation Rises in February

The Danish Krone (DKK) failed to gain on Sterling following today’s release of February’s Danish Consumer Price Index, which rose by 0.8%. However, the report was drowned out by rising fears over Denmark’s handling of the coronavirus.

Prime Minister Mette Frederiksen commented that tourism and transport would be affected by the spread of Covid-19, with the number of cases in Denmark now being confirmed at 59.

Mr Frederiksen said:

‘This is going to have an effect on the Danish economy sooner than most people might have expected … Danish authorities are working based on doing all we can in Denmark to keep the spread of infection as low as possible. That is still the most important strategy.’

The Danish Krone (DKK) is unlikely to make any significant gains against the Pound (GBP) today as the Danish economy relies heavily on foreign trade. Due to rising cases of Covid-19 threatening to stall the global economy, many DKK investors are remaining jittery until further news.

GBP/DKK Outlook: UK Budget Report in Focus

Sterling investors will be looking ahead to tomorrow’s release of January’s UK Manufacturing Production report. Any signs of improvement in Britain’s industrial sector would prove Pound-positive.

Tomorrow’s UK Budget Report will also remain firmly in focus, with any indications that this could aid the British economy post-coronavirus outbreak boosting the GBP/DKK exchange rate.

Danish Krone (DKK) traders will be paying close attention to global economic developments this week. We could see DKK begin to fall on heightened fears over a global economic recession as this would directly weigh on Denmark’s global trade-reliant economy.

David Moore

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