Bias: The bias is bearish-to-range-bound, as the DKK is below the 90-day average and in the lower half of the 3-month range.
Key drivers:
• Rate gap: The US Federal Reserve is expected to ease rates while the Danish central bank has recently cut rates to maintain its euro peg, potentially widening the gap that favors USD strength.
• Risk/commodities: Recent declines in oil prices could affect global risk appetite, impacting the USD positively while keeping the DKK under pressure due to its ties with European market conditions.
• One macro factor: The current geopolitical tensions, including US airstrikes in Venezuela, could lead to increased volatility in the USD as investors react to risks in international markets.
Range: The DKK/USD is likely to hold within its recent range, with movement likely to remain stable but susceptible to external shocks.
What could change it:
• Upside risk: A significant rebound in oil prices could boost the DKK.
• Downside risk: Further deterioration of US labor data may enhance USD buying as safe haven demand increases.
