GBP/DKK Outlook:
The outlook for GBP/DKK is slightly positive, but likely to move sideways, as the rate is above its recent average but lacks a clear driver.
Key drivers:
- Rate gap: The Bank of England's recent dovish stance may put pressure on GBP, while Denmark’s central bank has aligned its policies with the European Central Bank to maintain stability in DKK.
- Risk/commodities: As oil prices continue to fluctuate, higher prices could strengthen the GBP but have mixed influences on DKK due to trade connections.
- One macro factor: The UK’s fourth-quarter GDP data may provide unexpected volatility, particularly if growth outpaces expectations.
Range:
GBP/DKK is expected to hold within its recent stable range but could drift slightly as market conditions remain mixed.
What could change it:
- Upside risk: A better-than-expected GDP growth report could lift the GBP.
- Downside risk: Heightened concerns around the stability of the krone’s peg to the euro may weaken DKK further.