DKK/USD Outlook:
The DKK/USD exchange rate is slightly positive but likely to move sideways, as it is just above the 90-day average and remains within a stable range. A lack of distinct current drivers suggests limited volatility in the near term.
Key drivers:
• Rate gap: The difference in monetary policy between Denmark’s central bank and the Federal Reserve is narrowing as Denmark has recently cut interest rates to defend its currency peg.
• Risk/commodities: The current rise in safe-haven demand for the USD amid geopolitical tensions may put pressure on the DKK, limiting its gains against the USD.
• One macro factor: Recent data indicates a significant decrease in US jobless claims, reflecting labor market strength and contributing to the USD's resilience.
Range:
The DKK/USD is expected to hold steady within its recent 3-month range, with movements likely staying contained.
What could change it:
• Upside risk: An unexpected stronger economic performance in Denmark could bolster the DKK against the USD.
• Downside risk: Renewed geopolitical tensions leading to a surge in USD demand could weaken the DKK.
