USD/DKK Outlook: Bearish, as the rate is currently below its recent average and near its recent lows, reflecting negative pressures on the USD.
Key drivers:
• Rate gap: The Federal Reserve is expected to trim interest rates, while the Danish central bank maintains stability, weakening the dollar's appeal.
• Risk/commodities: Recent declines in oil prices put additional pressure on the USD, as oil movements often impact the currency's strength.
• One macro factor: Ongoing geopolitical tensions, including airstrikes in Venezuela and tariff threats, create uncertainty, further burdening the USD.
Range: The USD/DKK is likely to drift lower within its recent 3-month range, as current conditions do not favor a reversal.
What could change it:
• Upside risk: A surprise stronger-than-expected US labor report could reinvigorate the USD.
• Downside risk: Heightened geopolitical issues or more aggressive tariff threats could deepen selling pressure on the dollar.