Key economic Indicators Actual Trend - Currencies Direct

Currency analysis: DKK

Key economic Indicators

Actual

Trend

Central bank sentiment

0.75%

Modest rates rises expected in the next 12 months

Gross domestic product

0.4%

Forecast raised to 1.7% in 2015

Consumer Price Index

0.5%

Improving in H2

Unemployment rate

4.8%

Improving in Q2

Trade balance

DKK 9441 M

Current account flow should turn positive thanks to higher return on investments abroad during the summer months

Currency trend: GBPDKK

Insight The Danish krone got a boost recently as data suggested that business confidence improved in the month of May. Confidence came in at -6, a slight improvement from the previous month. The krone’s outlook in June is likely to be volatile because Prime Minister Helle Thorning-Schmidt announced that a general election will be on 18 June – four months earlier than required. Ms Thorning-Schmidt, whose term ends in September, said she would not resign before the election but wants voters to have their say on policy. In other news, the Danish government raised economic forecasts for 2015 to 1.7%, and next year’s growth estimate is unchanged at 1.4%. Meanwhile, the UK election’s feel-good factor is fading and Sterling is under pressure as recent weakness in manufacturing also spread to the service sector. The overall growth in May was the lowest since December. This was confirmed when Q1 GDP growth, at just 0.4%, met expectations. On a positive note, May’s construction PMI came in above expectations. The main positive from the data is the employment component, which showed staffing levels rising sharply and accelerating in May. Sterling remains very sensitive to speculation about a rate rise, and the Bank of England has signalled that it is tracking employment and wages as main conditions for any change in its current accommodative monetary policy. ©Currencies Direct Ltd 2015. All rights reserved worldwide.