Despite the weakened Danish Krone (DKK) against the Euro (EUR), the Danish central bank has not intervened in the foreign exchange market, indicating that the current interest rate spread will likely remain unchanged. The Krone has shown slight appreciation recently, but the longest period without intervention since the Euro’s introduction continues. Nordea analysts suggest that a seasonal weakening could occur as dividend payments increase in the coming months.
No intervention from the Danish central bank
“Despite a weakened Danish krone against the euro, the Danish central bank has not yet intervened in the foreign exchange market. This supports our expectation that the current interest rate spread will be kept unchanged.”
“Since the peak in EUR/DKK in mid-January the Danish krone has appreciated slightly and is currently trading around 7.456 against the euro. Due to this, it is most likely that the record long period without intervention is still going on.”
“When the Danish krone weakens toward previous intervention levels, the risk of an independent Danish rate hike increases and the DESTR-€STR spread widens.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Source: https://www.fxstreet.com/news/dkk-intervention-remains-absent-nordea-202602041556
