GBP/DKK Outlook: Slightly positive, but likely to move sideways, as the exchange rate is above its recent average and near recent highs without a clear driving factor.
Key drivers:
• Rate gap: The Bank of England’s cautious stance on interest rates supports the British Pound, while Denmark's central bank has kept its rates stable in the face of local challenges.
• Risk/commodities: The Danish Krone has faced pressure as it approaches the upper limit of its fluctuation band against the Euro, indicating underlying weakness in the krone.
• One macro factor: Recent UK retail sales and PMI data have shown resilience, boosting expectations for the GBP despite a lack of upcoming economic indicators.
Range: GBP/DKK is likely to hold within its current stable range, given the absence of strong directional drivers.
What could change it:
• Upside risk: Improved UK economic data or a shift in the Bank of England's interest rate outlook could bolster GBP further.
• Downside risk: Heightened political uncertainty in the UK or further weakening of the krone might pressure the exchange rate lower.
