Denmark: Danish Central bank will do whatever it takes not to hike interest rates – Nordea
EUR/DKK is trading at high levels and market pricing signals a risk of about 50% of an independent rate hike. Analysts at Nordea think the Danish central bank will do whatever it takes not to hike interest rates.
“The prospects of an increase in excess liquidity in the Danish market could intensify the pressure for a weaker DKK against the EUR in coming months.”
“In the current environment with massive easing of monetary policy from central banks we think the Danish central bank will do whatever it takes to avoid taking such action.”
“If the upward pressure on EUR/DKK intensifies, we think the Danish central bank will defend the fixed exchange regime by intervention at the FX market.”
“The Danish central bank has plenty of room for manoeuvre to use FX reserves to prevent any further upward pressure on EUR/DKK.”