EUR/DKK below 7.4500, positive carry in shorter dated FX forwards and low net position are all reminiscent of the experience from 2014.
We believe the current situation is likely to prevail over coming months - we forecast EUR/DKK at 7.4490 in 3-12M and the key policy rate at minus 0.65% in 12M.
We recommend Danish pension funds with a hedging mandate hedge EUR exposure in FX forwards where the carry is positive, i.e. up to 1M or beyond 5Y and Danish corporations with EUR payables hedge on 1-2Y.
To read the entire report Please click on the pdf File Below