USD/DKK Outlook: Bearish, as the rate is below its recent average and near recent lows, facing downward pressure from geopolitical tensions.
Key drivers:
- Rate gap: The Federal Reserve's decision to halt rate cuts contrasts with the ongoing uncertainty in U.S. economic policy, likely placing pressure on the USD compared to the DKK.
- Risk/commodities: Heightened geopolitical tensions, particularly tariff threats from the U.S., have led investors to seek safer assets, negatively impacting demand for the dollar.
- One macro factor: Recent global moves toward de-dollarization have intensified, with key nations planning to increase local currency trade, posing additional challenges for the USD.
Range: The USD/DKK is likely to drift within its recent range as pressures mount but could face significant fluctuations depending on geopolitical developments.
What could change it:
- Upside risk: A positive surprise in upcoming U.S. economic data, such as strong manufacturing PMI results, could boost the USD.
- Downside risk: Continued deterioration in global sentiment or further escalation of geopolitical tensions may deepen USD weakness.
