The Pound Sterling to Danish Krone (GBP/DKK) Exchange Rate is Trending within a Tight Range Despite Poor Danish Data

After having advanced considerably last week in response to sanguine domestic data, the Pound is holding relatively steady on Monday. The spate of positive data results, with particular reference to accelerated wage growth, caused futures traders to bring forward bets as to the timing of a Bank of England (BoE) benchmark interest rate hike. Some are going as far as to say that they expect the British central bank to begin a rate liftoff within a similar period to the Federal Reserve, something very few hawks could have predicted at the beginning of the year. Meanwhile, last week saw the Danish Krone weaken against many of its peers thanks to an absence of data to provoke volatility. The Krone has seen dampened demand as the geopolitical situation in Greece spills out onto neighbouring countries amid fears that a Greek exit could have widespread fallout.

The Pound Sterling to Danish Krone (GBP/DKK) exchange rate was trending in the region of 10.4280 on Monday morning. With a complete absence of British data to provoke changes, the Pound is trading relatively statically versus its closest currency rivals. A slight depreciation can be linked to traders locking in profit after last week’s appreciation opened up some attractive selling opportunities. The Krone, however, avoided a large declination despite relatively disappointing domestic data results. On the year, Retail Sales dived by -3.8% in May despite predictions of a 1.4% increase. On the month, May’s Retail Sales declined by -1.2% although analysts expected 0.54% growth in sales. In addition, June’s Consumer Confidence dropped beyond the market consensus from 13.0 to 9.8. The Krone avoided falling further, however, thanks to crude oil prices edging higher.

Commenting on Danish Consumer Confidence and Retail Sales, Statistics Denmark stated; ‘Consumers' assessment of their own current financial situation dropped from a year ago, with the corresponding index falling to 3.8 from 8.0. Households expect a slightly larger fall in unemployment in the next one year. Retail sales fell 1.2 percent month-on-month in May, faster than April's 0.4 percent decline. This was the second straight decline and the third decline so far this year.’

Looking ahead, the Pound Sterling to Danish Krone (GBP/DKK) exchange rate has the potential to be subdued over the coming week with a quiet economic docket. A complete absence of Danish data should see the Krone subject to global economic developments. With a lack of British economic data, the Pound is most likely to see volatility as a result of changes in the wider currency market.