Pound to Danish Krone Exchange Rate Slips amid Mixed Danish Retail Sales Report
While broad weakness in the Euro (EUR) has made it easier for the Pound to Danish Krone (GBP/DKK) exchange rate to avoid losses this week, the Pound (GBP) has been unable to hold its best levels versus the Euro-pegged Danish Krone (DKK) either.
After slipping on Brexit uncertainties last week, GBP/DKK may be on track to regain most of those losses this week.
GBP/DKK opened this week at the level of 8.62 and trended lower earlier in the week, due to market concerns about long-term uncertainty in the Brexit process.
However, due to poor Eurozone data the Euro-pegged Danish Krone tumbled yesterday, and GBP/DKK briefly touched on its highest level in over a week – 8.64.
Due to a lack of fresh strong support for the Pound though, the Pound to Danish Krone exchange rate was unable to hold this high and trended closer to the level of 8.63 at the time of writing today.
Pound (GBP) Exchange Rates Lack Drive with Brexit Uncertainties Weighing
The Pound to Danish Krone (GBP/DKK) exchange rate may be trending above the week’s opening levels today, but this is largely due to weakness in the Euro (EUR) causing the Danish Krone to fall.
The Pound itself still lacks much in the way of solid support, which means its potential for gains is limited even against weaker rivals.
Earlier in the week, investors sold the Pound on speculation that the current level of Brexit uncertainty would continue for months to come amid doubts that the Parliament deadlock can be broken, as well as general UK political uncertainties.
Prime Minister Theresa May is facing ramped up calls to step down, worsening market concerns that she could be replaced with a no-deal Brexit supporting MP, or that a general election could be possible.
Amid a lack of expected major developments any time soon, the Pound’s movement is relatively narrow.
Danish Krone (DKK) Exchange Rates Unappealing amid Weak Eurozone Data
The Danish Krone is pegged to the Euro (EUR), meaning that the currency moves in-pace with the Euro’s movements. As a result, it is directly driven by the movements of the influential shared currency.
This is why the Danish Krone has been much weaker since the end of last week, when Eurozone PMI projections for April fell short of expectations in many notable prints.
This week’s Eurozone data has been no better either, with Tuesday’s Eurozone confidence projection disappointing, and Wednesday’s data from France and Germany missing forecasts as well.
Euro and Danish Krone Investors were particularly disappointed by Ifo’s German business confidence stats from April, which fell short of forecasts in every major print and worsened concerns about the health of Germany’s economy.
Needless to say, as market concerns about the health of Eurozone economic growth dominate Danish Krone movement, some mixed March retail sales results from Denmark did little to influence movement this morning.
Danish retail sales improved from 0.3% to 0.7% month-on-month, but the yearly figure slowed from 1.3% to just 0.5%.
Pound to Danish Krone (GBP/DKK) Exchange Rate Could See Further Gains if Eurozone Data Remains Weak
Next week’s UK economic calendar will be a little more influential, but a lack of expected major Brexit developments any time soon has left the Pound’s volatility lower and the Pound has been trending in a tighter region, influenced more by movement in rival currencies.
Unless there are some major surprises in UK PMI data or the Bank of England’s (BoE) May policy decision, the Pound to Danish Krone (GBP/DKK) exchange rate is more likely to be driven by Brexit developments or Eurozone data.
Tomorrow’s French confidence and jobseekers data is unlikely to be significantly influential unless it is surprisingly strong, which could push GBP/DKK lower before markets close for the week.
Instead, the market focus will be on Monday’s Eurozone consumer confidence results, followed on Tuesday by a slew of stats including German unemployment and inflation, as well as growth data from France and the Eurozone overall.
As for the Pound, investors don’t expect any major Brexit developments imminently, but if there is any surprising Brexit news the Pound to Danish Krone (GBP/DKK) exchange rate outlook would certainly be impacted.