Further decline in EUR/DKK could trigger DN intervention – Danske Bank

Senior Analyst at Danske Bank Jens Pedersen sees the likeliness of FX intervention by the DN if EUR/DKK slips lower.

Key Quotes

“EUR/DKK continues to trade with a heavy tone – it drifted below the 7.4380 level last night without any significant impact on EUR/DKK FX forwards, though”.

“A narrow interest rate spread to EUR, a relatively low DKK net position and use of the DKK as a hedge against spill-over to the EUR from the pending UK referendum are likely to continue to weigh on EUR/DKK and we see downside risk to around the level of 7.4350, where we see Danmarks Nationalbank capping downside for the pair by selling DKK in FX intervention”.