CAD/DKK Outlook:
The CAD/DKK exchange rate is slightly weaker, but likely to move sideways as it trades near its recent average amid mixed signals from both currencies.
Key drivers:
• Rate gap: The Bank of Canada has held its interest rate steady, while Denmark's central bank maintains a non-intervention stance, which adds to the CAD's weaker position.
• Risk/commodities: While oil prices are currently well above average, easing prices have pressured the CAD, potentially impacting its attractiveness as a commodity-linked currency.
• One macro factor: Strong job growth in Canada has bolstered the economy but is tempered by rising trade tensions with the U.S., which could weigh on future currency performance.
Range:
Expect the CAD/DKK to hold within its recent range, with limited movement as both currencies show stable behavior.
What could change it:
• Upside risk: A significant rebound in oil prices could strengthen the CAD against the DKK.
• Downside risk: Continued volatility in oil prices and worsening trade relations with the U.S. could pressure the CAD lower.
