GBP/DKK Exchange Rate Falls Despite Growing Concerns for Danish Economy
The Pound to Danish Krone (GBP/DKK) exchange rate dipped by -0.2% today, with the pairing currently trading around 8.147kr.
The Danish Krone (DKK) edged higher today after Denmark’s retail sales figure for June rose from 5.2% to 6.6%. As a result, DKK investors are becoming more optimistic that Denmark’s economy could be on the road to recovery.
Meanwhile, Denmark is bracing for further easing of coronavirus restrictions, leaving many DKK traders hopeful that the nation could make a faster-than-expected growth in the economy.
Many Danish businesses are gearing up for a possible reopening as early as next months.
However, following reports that Nordic countries could be facing an economic quagmire owing the coronavirus pandemic, DKK investors have remained cautious.
Robert Bergqvist, chief economist at SEB bank, warned that many countries in Europe were ‘surrounded by great uncertainty’. He also added:
‘How Europe, the U.S and Asia recover is very important for the Nordics, as the region is dependent on the global economy.’
Pound (GBP) Sinks as Brexit Uncertainties Weigh on GBP
The Pound (GBP) failed to gain against the Danish Krone (DKK) today as a lack of UK economic data and uncertainty over Brexit is holding back Sterling.
However, GBP has found some support after the European Union’s Chief Brexit Negotiator, Michel Barnier, said that a UK-EU deal is ‘possible’.
Analysts at Reuters reported:
‘The European Union’s Brexit negotiator Michel Barnier expressed confidence at a closed-door meeting with national envoys to the bloc that a new deal with Britain was possible.’
‘Barnier’s comments after the latest round of EU-UK negotiations last week stand in sharp contrast with the downbeat assessment he delivered publicly in saying that London’s rigid positions on fisheries and the level playing field guarantees of fair competition meant a deal was “unlikely” for now.’
As a result, Pound (GBP) traders are remaining cautious as several uncertainties, including post-Brexit trade deals and the coronavirus pandemic, threaten to push the British economy over the edge.
GBP/DKK Outlook: Could Positive Brexit Developments Boost Sterling This Week?
Pound (GBP) investors will be looking ahead to tomorrow’s release of the latest CBI Distributive Trades Survey for July. If this confirms forecasts and sinks by -25%, then we could see the GBP suffer.
Danish Krone (DKK) traders, meanwhile, will be looking ahead to Thursday’s release of June’s Danish Unemployment Rate figure. However, if joblessness rose last month, we could see the Danish Krone shed some of its gains.
The GBP/DKK exchange rate will remain sensitive to Brexit developments this week. Any signs of a consensus between the UK and the EU would prove GBP-positive.