Bias: The USD/DKK is range-bound as it is near the 90-day average and trading in the middle of its 3-month range.
Key drivers:
• Rate gap: The US Federal Reserve is expected to make rate cuts soon, which could weaken the USD relative to the DKK.
• Risk/commodities: Recent US military actions have increased uncertainty, which may support safe-haven currencies like the DKK.
• One macro factor: Denmark's foreign-exchange reserves have declined recently, indicating potential pressure on the krone's stability.
Range: The USD/DKK is likely to drift within its recent range as market reactions to upcoming employment data and geopolitical developments unfold.
What could change it:
• Upside risk: Stronger-than-expected US job data could boost demand for the USD.
• Downside risk: Any dovish statements from Federal Reserve officials could increase the downward pressure on the USD.