EUR/DKK Outlook: Slightly weaker, but likely to move sideways, as the rate is below its recent average and near recent lows without strong supporting drivers.
Key drivers:
• The European Central Bank has signaled a cautious approach to policy, leaving interest rates unchanged amid mixed economic indicators, impacting the euro's strength.
• The recent rise in oil prices could create inflation concerns, which generally would pressure the euro lower if sustained, impacting trade balances and competitiveness.
• Economic growth in the Eurozone is modest, with a recent GDP figure showing growth at 0.3%, but fears of the euro's strength harming exports create uncertainty.
Range: The EUR/DKK rate is likely to hold near current levels, drifting within the recent 3-month range.
What could change it:
• Upside risk could stem from unexpected positive economic data from the Eurozone or a significant recovery in investor confidence.
• Downside risk might increase if geopolitical tensions escalate further, adding to economic uncertainty and weakening the euro.
