EUR/DKK Outlook: Slightly weaker, but likely to move sideways, as the exchange rate is below its recent average and lacking a clear driver.
Key drivers:
• Rate gap: The European Central Bank maintains a cautious approach, which contrasts with potential hawkish measures from Danmarks Nationalbank in response to the krone's depreciation.
• Risk/commodities: Recent oil price increases could weigh on the Eurozone's economy by raising energy costs, affecting inflation pressures and euro strength.
• One macro factor: The observed buoyancy in the Eurozone’s economic sentiment index suggests a potential for recovery, but must be watched closely for moderation in GDP growth.
Range: The EUR/DKK is likely to hold within its recent range as external pressures and domestic factors balance out.
What could change it:
• Upside risk: Confirmation of a solid economic recovery in the Eurozone could boost the euro.
• Downside risk: A geopolitical crisis affecting Danish exports could hurt the krone's stability.
