29 Jan 2015
EUR/DKK supported around 7.44 – Danske Bank
FXStreet (Edinburgh) - Lars Tranberg Rasmussen, Senior Analyst at Danske Bank, expects EUR/DKK to stabilize around 7.44.
Key Quotes
“The reaction from DN follows in the wake of strong appreciation pressure on the Danish krone (DKK) triggered by, first, speculation on whether DN would follow the Swiss central bank (SNB) and abandon the fixed exchange rate policy and, second, the impact of the ECB’s announcement of a massive asset purchase programme”.
“We do not assess the fixed exchange rate policy to be in danger. As EUR/DKK is on the strong side of the fluctuation band, DN has in theory unlimited opportunities to weaken the DKK via foreign currency purchases”.
“We expect DN to continue to defend EUR/DKK within the historically narrow fluctuation band, i.e. EUR/DKK above 7.42. In the immediate future, DN will probably actively support EUR/DKK around the 7.44 level to avoid fuelling speculation about the sustainability of the fixed exchange rate policy”.
Key Quotes
“The reaction from DN follows in the wake of strong appreciation pressure on the Danish krone (DKK) triggered by, first, speculation on whether DN would follow the Swiss central bank (SNB) and abandon the fixed exchange rate policy and, second, the impact of the ECB’s announcement of a massive asset purchase programme”.
“We do not assess the fixed exchange rate policy to be in danger. As EUR/DKK is on the strong side of the fluctuation band, DN has in theory unlimited opportunities to weaken the DKK via foreign currency purchases”.
“We expect DN to continue to defend EUR/DKK within the historically narrow fluctuation band, i.e. EUR/DKK above 7.42. In the immediate future, DN will probably actively support EUR/DKK around the 7.44 level to avoid fuelling speculation about the sustainability of the fixed exchange rate policy”.