EUR/DKK Outlook:
The EUR/DKK exchange rate is currently trading at 90-day highs, near its 3-month average, suggesting a slightly positive outlook but likely to move sideways. The lack of a strong driver supports this neutral stance.
Key drivers:
• Rate gap: The European Central Bank (ECB) and Denmark's central bank have both cut rates recently, resulting in low interest differentials that keep the EUR/DKK stable.
• Risk/commodities: The recent increase in oil prices, which are notably above their 3-month average, could weigh on the euro if energy costs continue to rise and impact inflation.
• One macro factor: The Eurozone's consumer confidence remains weak, impeding the euro's recovery despite some signs of improvement.
Range:
The EUR/DKK is likely to hold within its recent range, with little movement expected as both currencies remain tightly aligned.
What could change it:
• Upside risk: A significant improvement in Eurozone economic indicators, like PMI data, could support the euro.
• Downside risk: Continued pessimism in consumer confidence could further pressure the euro, reducing its attractiveness.
