Based on Danske Financial institution, EUR/DKK will proceed to commerce at elevated ranges aided by a big low cost in FX forwa
Based on Danske Financial institution, EUR/DKK will proceed to commerce at elevated ranges aided by a big low cost in FX forwards and subsequent 12 months by the circulate of trip cash.
Key quotes
“Danmarks Nationalbank (DN) has simply printed October’s FX reserve knowledge and central financial institution steadiness sheet knowledge. In October, the FX reserve declined DKK2.3bn to DKK443bn. The decline was partly on account of FX intervention. DN offered DKK0.4bn in FX reserves on account of intervention.”
“The DKK0.4bn in FX intervention marks the primary time since January that DN has intervened in FX markets. EUR/DKK traded above 7.4700 and thus near record-high ranges throughout a big a part of October, which prompted the motion from DN.”
“It may spur hypothesis about an impartial DN coverage charge hike. Whereas that’s justified, we predict it nonetheless a while away as DN has ample room to attract down the FX reserve to handle the peg – we estimate about DKK40bn.”