DKK & INR - Markets & outlook
Danish krone - DKK:
The Danish kroner (DKK) is fixed to the Euro so the EURDKK exchange rate should not fluctuate very much. The fixed exchange rate policy provides Danish businesses and consumers with greater stability and predictability in their financial transactions, particularly those involving international trade and investment. It reduces the risks associated with fluctuations in currency values, which can be particularly important for small, export-oriented economies like Denmark. However, the policy also limits the flexibility of the Danish central bank to adjust interest rates or implement other monetary policies in response to changing economic conditions, as it must maintain the exchange rate within the agreed-upon range. In recent years, Denmark has faced challenges in maintaining the fixed exchange rate policy, particularly in the face of currency fluctuations and changes in interest rates in other countries, which have required the DNB to intervene frequently in currency markets.
Indian rupee - INR:
The Indian rupee has steadily weakened (like most currencies) against the US dollar on fears that surging energy prices could spur inflation and interest rate hikes.
India is the third-largest oil-consuming country, after the U.S. and China.
India imports most of its oil requirements and higher crude prices tend to push up domestic inflation.
Investors are shedding Asian currencies including the Indian rupee as the dollar surges against major counterparts, driven by expectations that Trump’s anticipated policies—lower corporate taxes and deregulation—will stimulate U.S. growth.
Additionally, Asian currencies face the potential impact of Trump increasing tariffs, particularly targeting China. This combination is expected to bring a phase of heightened uncertainty and volatility for Asian currencies, with bankers noting that even the typically stable Indian rupee will feel the effects of the disruptions Trump’s policies may introduce.