AUD/DKK Outlook:
Slightly positive, but likely to move sideways, as the rate is above its recent average but lacks a clear driver to push it higher.
Key drivers:
• Rate gap: The Reserve Bank of Australia's recent rate hike signals tighter monetary policy compared to Danmarks Nationalbank, which has recently lowered its rates to defend the krone's peg.
• Risk/commodities: Ongoing global demand for Australian commodities supports the AUD, which is benefiting from a weaker US dollar due to softer economic data from the U.S.
• Trade dynamics: Increased demand for Australian exports, particularly to China, has strengthened the AUD, driven by a recovering Chinese economy.
Range:
Expect AUD/DKK to drift within the current trading range, as it has shown relative stability.
What could change it:
• Upside risk: A further rate increase by the RBA in response to continued inflation pressure could strengthen the AUD.
• Downside risk: Increased concern over the stability of the krone's peg could spill over into broader uncertainty about the DKK.