EUR/DKK: 7.435 marks the lowest level the Danish central bank is set to tolerate – Nordea

Since the independent Danish interest rate hike in March 2020, EUR/DKK has moved from above 7.470 to the current level around 7.436. In February the Danish central bank sold DKK0.4 B in the currency market to counter strengthening of the krone against the euro. This is the first time in almost four years that the bank has tried to force EUR/DKK higher. More intervention is expected in the coming months, economists at Nordea brief.

Key quotes

“As usual the central bank has not revealed the exact EUR/DKK level where it intervened in February. However, judging from the development in EUR/DKK during the month it seems like at level slightly above 7.435 marks the lower tolerance level for the central bank at the current juncture.”

“The key reason for the downward pressure on EUR/DKK is the very low excess liquidity that spills over to a very large spread between money market rates in Denmark and the euro area.”

“According to our estimates, the amount of excess liquidity in the Danish money market will be squeezed even further towards the end of March. This will most likely trigger more intervention from the central bank and probably also on a larger scale compared to February. Despite this we do not expect the intervention to trigger an independent Danish rate cut.” 

“We expect the central bank to keep its certificate of deposit rate unchanged at -0.60% at least until end-2022.”


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Get Weekly Crypto trade ideas!  
Empower yourself with the best market insights

Join FXStreet Premium!    

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD advances toward 1.20 amid an improving market mood

EUR/USD is rising toward 1.20, paring its losses as falling returns on US Treasuries push the dollar lower. Optimism about vaccines and a stronger global economy weigh on the greenback as well. US Building Permits, Housing Starts and Consumer Confidence are eyed.


GBP/USD rises toward 1.38 as the dollar weakens with yields

GBP/USD is trading closer to 1.38, recovering from the lows as falling US Treasury yields are dragging the dollar down ahead of several data releases. Sterling continues benefiting from Britain's vaccination campaign.


Stellar bulls on wrong side of uphill battle

XLM price has erected an ascending parallel channel on the 4-hour chart. A bounce from the setup’s lower trend line, although logical, seems unlikely. Stellar’s bear flag pattern on the 1-hour chart adds weight to the bearish outlook.

Read more

XAU/USD faces stiff resistance near $1,775, upside potential remains intact

Gold has been trending higher after taking support near the double bottom formation on the daily chart. However, XAU/USD now faces stiff resistance near the $1,775 hurdle. MACD indicator tilts in favor of bulls.

Gold News

Gamestop waits for breakout signal, technical levels to watch

GameStop is struggling for relevance as COIN takes over! GME shares under pressure, down 6% on Thursday. GME is looking for a new CEO according to Reuters.

Read more