GBP/DKK Exchange Rate Edges Higher as Danish Economic Outlook Darkens Following Weak GDP
The Pound to Danish Krone (GBP/DKK) exchange rate rose by 0.2% this morning, with the pairing currently trading around 8.257kr.
The Danish Krone (DKK) suffered today following the release of the flash Danish GDP for the second quarter, which plunged from -2% to -7.4%. As a result, DKK investors have become concerned for the Danish economy following the historic drop in economic growth.
Tore Stramer, senior economist with the Danish Chamber of Commerce (Dansk Erhverv), commented on the data:
‘There is no doubt that today’s GDP figures for the second quarter will go down in the economic history books
‘A fall in BNP of 7.4 percent over a single quarter is incredibly dramatic and never before seen in peacetime.’
Meanwhile, Danish Krone (DKK) are remaining cautious after this week saw reports that the coronavirus spread had accelerated, with the reproduction rate rising to 1.4.
Magnus Heunicke, Denmark’s Health Minister, said: ‘The virus is moving through our society once again.’
Pound (GBP) Edges Higher as UK Secures Agreement on 90 Million Doses of Potential Covid-19 Vaccines
The Pound (GBP) edged higher today following reports that the UK has reached agreements on access to 90 million doses of potential Covid-19 vaccines. Kate Bingham, chair of the Government’s Vaccines Taskforce, said that she was ‘reasonably confident’ of a vaccine being found to reduce the symptoms of the coronavirus.
As a result, GBP investors have become more optimistic that the UK’s economy could make a swift recovery on the possibility of a Covid-19 vaccine.
Business secretary Alok Sharma said:
‘The government’s strategy to build a portfolio of promising vaccine candidates will ensure we have the best chance possible of finding one that works.
‘Today’s agreements will not only benefit people in the UK but will ensure fair and equitable access of a vaccine around the world, potentially protecting hundreds of millions of lives.’
Meanwhile, Sterling has also benefited from growing hopes over a post-Brexit trade deal between the UK and the European Union. This follows comments from David Frost, the UK’s Chief Negotiator, who said that he was confident that he could secure a deal as early as next month.
GBP/DKK Outlook: Could an Increasing Covid-19 Infection Rate in Denmark Drag Down the Danish Krone Next Week?
Pound (GBP) investors will be looking ahead to Sunday’s publication of the UK Rightmove house price index for August. Any improvement in the British economy would prove GBP-positive.
Looking ahead to Wednesday, we could see Sterling edge higher on improving inflation data for July. However, if the CPI reading falls below consensus, then we could see the Pound suffer.
Danish Krone (DKK) investors will be keeping a close eye on Denmark’s coronavirus situation. If the infection rate continues to increase, then we could see the GBP/DKK exchange rate hold onto its gains.
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