EUR/DKK Outlook: Slightly weaker, but likely to move sideways, as the rate is near its three-month average but close to recent lows.
Key drivers:
• Rate gap: The European Central Bank (ECB) maintains a neutral policy, while Denmark's central bank cut rates recently to keep the krone pegged, affecting their relative performances.
• Risk/commodities: Oil prices are currently well above average, which may impact the Eurozone's economic conditions and inflation outlook, influencing the euro indirectly.
• One macro factor: Current Eurozone inflation trends are anticipated to decline, which may temper the euro's strength further as economic growth appears stable.
Range: Expect EUR/DKK to likely hold within its recent 3-month range.
What could change it:
• Upside risk: An improvement in German consumer confidence could lift the euro.
• Downside risk: Continued geopolitical tensions affecting the Eurozone could lead to a further weakening of the euro against the krone.