CAD/DKK Outlook:
The CAD/DKK exchange rate is likely to move sideways as it is trading near its recent average and within a stable three-month range. The uncertainty from fluctuating oil prices could weigh on the CAD's performance.
Key drivers:
- Rate gap: The divergence between the Bank of Canada’s cautious policy and Denmark's central bank's recent rate cuts contributes to a weaker CAD against the DKK.
- Risk/commodities: Recent oil price fluctuations, trading significantly above average, are contributing to the CAD's volatility, given Canada’s status as a major oil exporter.
- One macro factor: Ongoing trade tensions between Canada and the U.S. are adding downward pressure on the CAD, impacting its attractiveness to investors.
Range:
Expect the CAD/DKK to hold within its established range, with potential drift due to external influences.
What could change it:
- Upside risk: A significant recovery in oil prices could boost the CAD.
- Downside risk: Escalation in U.S.-Canada trade tensions may further pressure the CAD.
