Danmarks Nationalbank (DN) purchased FX for DKK2.4bn in intervention in October - it marked the second straight month of intervention.
We expect the ECB to strike a more dovish tone at Thursday's meeting, which could intensify the present downwards pressure on EUR/DKK and force DN to make additional FX intervention purchases.
We expect DN to cap EUR/DKK downside around the present level of 7.4430 and forecast EUR/DKK at 7.4475 in 1M and 3M after a 10bp unilateral DN rate cut.
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