Denmark’s foreign exchange reserves remain unchanged in October
Source: FxWire Pro - Commentary / 02 Nov 2017 15:10:46 America/New_York
Denmark’s foreign exchange reserves remained unchanged in October at DKK 464 billion, with the central bank making no interventions in the FX market. Government deposits came in at DKK 141 billion in October, down from DKK 145 billion in September.
This is the seventh consecutive month of no intervention in the FX market, the longest period with no FX intervention since the start of 2014. EUR/DKK has traded above, but close to, 7.4400 in October.
There continues to be some focus on European politics in the market for EUR/DKK as the political situation in Catalonia appears to be uncertain, while Italy is set to hold elections next year. Moreover, there have been fluctuations in short-dated EUR/DKK FX forwards, noted Danske Bank in a research report. These have been the main drivers of EUR/DKK the past month.
“Overall, Danske Bank’s DKK Exchange Market Pressure Index (EMPI) continues to signal persistent downwards pressure on EUR/DKK as DKK remains supported by strong economic fundamentals, e.g. a rising current account surplus”, stated Danske Bank.
The EUR/DKK pair is expected to trade around 7.4425 on the one month to six month horizon and 7.4450 on 12 month horizon, while the DN is likely to keep the key interest rates unchanged, added Danske Bank.
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