EUR/DKK: Trading around 4.473 – Danske Bank

Danmarks Nationalbank has announced a 15bp hike in its key policy rates.  Analysts at Danske Bank are doubtful the rate hike will have much impact on the currency in the short term. EUR/DKK trades at 7.473.

Key quotes

“Danmarks Nationalbank has announced that it is hiking the interest rate on certificates of deposits by 15bp to -0.60% and the interest rate on its new emergency repo facility to -0.35%.”

“We expect upward pressure on EUR/DKK to prevail near term and the pair to trade around 7.4732.”

“Large corporate dividend payments to foreign investors will put upward pressure on EUR/DKK in the coming week.”

“If this leads to further outflow, Danmarks Nationalbank may opt to respond with another rate hike of, for example, 15bp.”