DKK/USD Outlook:
Slightly positive, but likely to move sideways, as the rate is above its recent average but lacks a clear driver.
Key drivers:
- Rate gap: Denmark’s central bank has lowered interest rates to support its peg to the euro while the Federal Reserve has paused rate cuts, creating a widening interest rate gap that supports the DKK.
- Risk/commodities: An increase in trading volume for the DKK suggests heightened activity, although the broader geopolitical tensions are maintaining some caution around the U.S. dollar.
- One macro factor: The adjustment in global currency trading, with increased local currency settlements announced by BRICS nations, puts pressure on the dollar’s dominance.
Range:
The DKK/USD is likely to drift within its recent trading range, maintaining a steady profile.
What could change it:
- Upside risk: Stronger-than-expected U.S. jobless claims could weaken the dollar, potentially boosting the DKK.
- Downside risk: Continued geopolitical tensions could drive investors away from U.S. assets, further pressuring the dollar.
