GBP/DKK Exchange Rate Edges Higher Despite Growing Hopes for Danish Economy
The Pound to Danish Krone (GBP/DKK) exchange rate edged higher by 0.2% today, with the pairing currently trading around 8.315kr.
The Danish Krone (DKK) failed to gain against Sterling today following the release of Denmark’s trade balance data for May, which dipped from 9.4 billion to 9.2 billion.
As a result, some Danish Krone traders are feeling increasingly concerned as Denmark’s exports eased in May. With the Danish economy – like many others in Europe – struggling to recover from the Covid-19 crisis, this has weighed on the Danish currency.
Meanwhile, DKK investors have become increasingly concerned for Denmark’s economy, despite reports – according to the European Commission (EC) – that it could be the second-least hard hit in the European Union.
The EC’s forecasters commented:
‘Although Denmark was one of the first European countries to impose extensive lockdown measures in response to the COVID-19 pandemic, economic activity in the first quarter of 2020 proved more resilient than previously expected.’
Pound (GBP) Edges Higher Following Yesterday’s Summer Statement
The Pound (GBP) performed well against the Danish Krone (DKK) today following yesterday’s Summer Statement from Chancellor Rishi Sunak. As a result, GBP investors have become more hopeful that the UK could be on the road for recovery.
Institute for Fiscal Studies (IFS) deputy director Carl Emmerson commented on Mr Sunak’s announcement:
‘The Chancellor also said in his speech yesterday that over the medium term we must and we will put our public finances back on a sustainable footing.’
‘Now what I think that means is that once we’re through the crisis phase, once the economy has established its new normal, we are probably going to find that the economy is not as big as what it would have been had the coronavirus never hit.’
Today saw concerning reports that Boots and John Lewis are set to lose thousands of jobs. With a great deal of uncertainty still facing the British economy, this has left many GBP investors feeling jittery.
Walgreens Boots Alliance said in its statement:
‘The adverse impact of COVID-19 on sales in the quarter was approximately $700 million to $750 million, with the majority of the impact related to the Retail Pharmacy International division. This reflected a dramatic reduction in footfall in Boots UK stores – down 85 percent in April – as consumers were advised to leave home only for food and medicine.’
GBP/DKK Forecast: Could Positive Danish Inflation Buoy the Danish Krone?
Danish Krone (DKK) investors will be looking ahead to tomorrow’s release of the Danish inflation data for June. Any signs of improvement in Danish inflation could boost the DKK/GBP exchange rate.
Sterling investors will be keeping a close eye on UK-EU post-Brexit negotiations. If these show any signs of compromise, then we could see the Pound head higher.
The GBP/DKK exchange rate will be driven by speculations over Britain’s economic recovery this week. If the UK looks headed for a deeper recession than previously forecast, we could see GBP suffer.