Pound Sterling Danish Krone (GBP/DKK) Exchange Rate Left Muted as UK Retail Sales Disappoint
The Pound Sterling Danish Krone (GBP/DKK) exchange rate was left flat today, with the pairing trading at around 8.7280Kr.
Sterling remained muted on Thursday as data revealed that UK shoppers unexpectedly cut back on shopping in October.
British consumers have helped the UK economy through the ongoing Brexit uncertainty, so October’s fall in sales added to further signs of weak economic growth and weighed on GBP.
The Office for National Statistics (ONS) said that in the three months to October, sales rose at the weakest pace in a year-and-a-half while monthly sales unexpectedly fell by -0.1%.
Commenting on this morning’s data, an ONS spokesperson said:
‘Department stores rebounded in October, driven by promotional events and an earlier introduction of Christmas lines. However, their sales still remain significantly down over the longer term.’
Danish Krone (DKK) Flat as GDP Edges Higher
Thursday saw the release of Denmark’s GDP growth rate, which showed the economy expanded by 0.3% in the three months to September.
GDP increased as expected and this followed the second quarter’s expansion of 0.9%.
This marks the eighth consecutive quarter of expansions which likely provided an upswing of support for the Danish Krone.
However, the rate of growth during the third quarter was below the long-running average of 0.42% which likely limited any gains.
Sterling (GBP) Muted as Political Developments Offset Weak Data
The Pound was left flat this week as political developments offset a slew of disappointing UK data which should have weighed on the currency.
Earlier in the week data revealed that average earnings rose at a slower pace in the third quarter while the number of unemployed Britons increased.
Added to this, on Wednesday data showed that inflation weakened to its lowest level in close to three years which increased the pressure on the Bank of England (BoE) to make its next move a cut.
However, Sterling continued to receive an upswing of support from Nigel Farage’s comments on Monday.
The Brexit Party leader revealed that his party would not contest the seats the Conservatives won in the 2017 election, which will likely increase the chance that Prime Minister Boris Johnson will remain in power.
However, on Wednesday Farage announced he would stand down no more of his party members, although this did little to stop the rise in GBP.
Commenting on this, fund manager at Legal & General Investment Management, Justin Onuekwusi said:
‘If you start to see the Labour [party] making gains in the polls it will be interesting to see what the impact on Sterling will be. I think Sterling is priced too much for a Boris win.’
Pound Danish Krone Outlook: Will Election Optimism Buoy GBP?
Looking to the end of the week, the Pound (GBP) could edge higher against the Danish Krone (DKK) if there are further signs the Conservatives are likely to secure a majority in December’s election.
If political optimism increases, it is likely Sterling will receive an upswing of support.
Meanwhile, as there is a lack of Danish economic data due for release until the end of next week, it is likely Danish Krone traders will be looking to Eurozone developments.
If the bloc’s final inflation rate for October disappoints, falling further from the European Central Bank’s (ECB) target, it is likely the Pound Danish Krone (GBP/DKK) exchange rate will rise.