DKK: Danish CB With Knife In The Banks Guts

DKK: Danish CB With Knife In The Banks Guts by Thomas Borgsmidt

For the last couple of month the Danish currency (DKK) has been under pressure for at revision upwards in relation to the EUR. The story is more complicated than a simple speculation rush as happened to the CHF. The CHF is probably more connected to the crisis in Russia than other currencies.

The background is that due to a referendum Denmark is not member of the common currency and has for 30 years maintained a fixed exchange rate relative to the EUR. The reason is obvious when you notice a GDP of 1800 bio. DKK has im- and exports of 1000 DKK – exports higher than imports. It is...