GBP/DKK Outlook:
The GBP/DKK rate is likely to decrease as it is currently near recent lows and below its 90-day average. Pressures from expectations of an interest rate cut from the Bank of England add to the bearish outlook for the pound.
Key drivers:
• Rate gap: The Bank of England's cautious stance on interest rates contrasts with Denmark's lower rates, creating a favorable environment for the krone.
• Risk/commodities: Global oil prices remain volatile, with fluctuations prompting safer investments in currencies like the krone.
• One macro factor: Ongoing UK inflation concerns could influence monetary policy decisions from the BoE, further affecting the pound's strength.
Range:
The GBP/DKK rate is likely to drift within its recent 3-month range as bearish pressure prevails.
What could change it:
• Upside risk: A surprise halt in UK rate cuts could bolster the pound.
• Downside risk: Continued weak retail sales data may deepen bearish sentiment for the GBP.