USD/DKK Outlook:
Bearish, given that the rate is below its recent average and near lower levels, reflecting current pressure on the USD.
Key drivers:
• Rate gap: The U.S. Federal Reserve's decision to maintain interest rates has weakened the USD compared to the Danish central bank's efforts to stabilize the DKK.
• Risk/commodities: The declining USD correlates with an uptick in oil prices, which typically supports the DKK through increased trade flows from oil-exposed industries.
• One macro factor: Increased trading volume in the DKK indicates heightened interest in the currency, which may support its stability amidst external pressures.
Range:
The USD/DKK is likely to drift within its recent 3-month range, potentially testing lower extremes.
What could change it:
• Upside risk: A surprise increase in U.S. payroll figures could strengthen the USD.
• Downside risk: Continued geopolitical tensions affecting U.S. trade policies may further diminish the USD's appeal.
