August 10, 2020 - Written by John Cameron
STORY LINK Pound Danish Krone (GBP/DKK) Exchange Rate Flat as Danish Inflation Edges Higher
Pound Sterling Danish Krone (GBP/DKK) Exchange Rate Muted as Denmark Posts Largest Trade Surplus Since March
The Pound Sterling Danish Krone (GBP/DKK) exchange rate remained flat on Monday morning. This left the pairing largely flat and trading at 8.2593Kr.
The Danish Krone was left flat against the Pound as data revealed inflation in Denmark nudged higher in July.
July’s inflation rate rose from June’s 0.3% to 0.5%, while the country’s harmonised inflation rate rose by an annual rate of 0.4%.
Added to this, the latest trade balance data revealed the country’s trade surplus rose to DKK 7.9 billion in June.
This was the largest trade surplus since March, which likely offered the currency support. Exports slumped by -2.3% while imports tumbled by -5%.
Sterling (GBP) Flat Ahead of Latest Employment Data
The Pound remained muted against the Danish Krone but was able to edge higher against the US Dollar ahead of this week’s unemployment and GDP data. This came after the currency suffered its largest daily fall on Friday against the safe-haven ‘Greenback’ since June.
The British currency was still below levels seen last week, when GBP/USD was able to reach a five-month high following the Bank of England’s (BoE) meeting.
However, the Pound struggled to make gains against the Krone as the latest unemployment data is expected to show the jobless rate rise from 3.9% to 4.2%.
In a note, analysts at ING wrote:
‘GBP could not hold on to last Thursday’s BoE (Bank of England)-inspired gains and instead is consolidating ahead of key employment data released tomorrow.
‘We prefer not to chase the story of upside surprises in UK activity nor a stronger GBP.’
Meanwhile, further data showed that as many as one third of British employers believe they will cut jobs by October. The survey from Chartered Institute of Personnel and Development (CIPD) and Adecco Group suggests that the impacts of the crisis will accelerate in the coming weeks.
The poll showed that around 33% of 2,000 companies believe they will make redundancies in the coming weeks as the government’s furlough scheme comes to an end.
According to Gerwyn Davies, the CIPD’s senior labour market adviser:
‘Until now, redundancies have been low – no doubt due to the job retention scheme – but we expect to see more redundancies come through this autumn, especially in the private sector, once the scheme closes.’
Pound Danish Krone Outlook: UK Claimant Count in Focus This Week
Looking ahead to Tuesday, the Pound (GBP) could edge lower against the Danish Krone (GBP) following the release of the latest British employment statistics.
Markets expect the latest British unemployment rate to jump in June thanks to the coronavirus pandemic. Added to this, average wage data is also expected to show average earnings have decreased.
However, the UK’s latest claimant count is expected to show the number of people filing for unemployment benefits has tumbled in July.
If the latest data shows the labour market is showing signs of recovery, it will offset weaker data and allow the Pound Danish Krone (GBP/DKK) to edge higher.
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TAGS: Daily Currency Updates