Danish Krone to Pound Sterling (DKK/GBP) Exchange Rate Holds Gain after Positive Confidence Data

The Danish Krone (DKK) to Pound Sterling (GBP) exchange rate strengthened on Thursday as Denmark’s Consumer Confidence Index increased for a record breaking sixth month in a row.

According to the Danish Statistics Office, its consumer confidence index increased its record-breaking run of gains by increasing from July’s reading of 10.6 to 11.4, beating economist expectations for a decline to a figure of 9.0.

The unprecedented sixth consecutive rise in the confidence index added to optimism that the Scandinavian nation’s economy should improve and strengthen over the month.

In recent years, the Danish economy has struggled to grow strongly due to the negative effects of the ongoing weakness in the Eurozone.

Denmark’s government expects the nation’s exports and consumer consumption to continue to improve and drive a recovery this year and in 2015. It forecasts that the economy will expand by 1.4% in 2014, and by 2% next year.

‘There is no doubt that private consumption plays a large part in the ongoing upturn. That is one of the most important parameters for a self-sustaining recovery of the economy,’ said Dankse Bank chief economist Steen Bocian.

Also supporting the Danish Krone was a separate report, which showed that retail sales in the country increased by 0.4% on a year on year basis in July. Reversing some of the -0.8% decline witnessed in the preceding month.

Danish Krone to Pound Sterling Exchange Rate Forecast

The Pound was weaker against the majority of its most traded peers on Thursday after it was weakened by the publication of disappointing retail sales data.

Data published by the Office for National Statistics showed that UK retail sales increased by just 0.1% in July, the number disappointed traders who had been expecting sales to have risen by 0.4%.

On a year on year basis retail sales advanced by 2.6% in July, worse than the 3% increase expected by economists.

The soft data caused investors to doubt Wednesdays Bank of England policy minutes and as such caused them to ease away from expecting an interest rate rise occurring before the end of the year.

‘Inflation down, Retail sales down 3 mths in row, Two MPC members keeping heads down today’ tweeted Steve Collins from Trade Desk.

The Danish currency could hold onto gains on Friday due to a lack of market moving data due from the UK.

Next Thursday sees the publication of the latest Danish Unemployment and Business Confidence data.

Business Confidence is widely expected to show a dip whilst unemployment is forecast to ease from 4% to 3.8%.

Danish Krone to Pound Sterling (DKK/GBP) Exchange Rate Maintains Advances

The Danish Krone surged higher against the Pound yesterday after Denmark’s Consumer Confidence Index increased on the previous figure despite having been forecast to retract. The gap widened with UK retail sales growth coming in below expectations.

With nothing in terms of domestic data pertaining to either the UK or Denmark it is highly likely that the Danish Krone to Pound Sterling exchange rate will continue to make gains. Any movement, therefore, is likely to be dictated by foreign currencies.