USD/DKK Outlook:
Bearish, as the rate is below its recent average and near recent lows.
Key drivers:
• Rate gap: The Federal Reserve has kept interest rates steady, while the Danish central bank has reduced rates, widening the gap in monetary policy.
• Risk/commodities: Recent uncertainty in oil markets may impact the USD, which retains a correlation with oil prices, affecting U.S. economic conditions.
• One macro factor: Geopolitical issues, including the Trump administration’s tariff threats, have negatively impacted the USD's position in global markets.
Range:
The USD/DKK pair is likely to drift within its 3-month range, with ongoing pressure from various factors.
What could change it:
• Upside risk: A stronger than expected result from upcoming employment data could bolster the USD.
• Downside risk: Continued geopolitical tensions and signs of a weak U.S. economic outlook may pressure the USD further.