Denmark's net foreign assets (NFA) increased to DKK972bn or 50% of GDP in Q1 this year - up DKK300bn, or 14% of GDP, since Q1 last year.
The strong external position looks like prevailing for the next few years, which will keep a negative carry on short EUR/DKK in the short end of the forward curve.
We recommend Danish pension funds with a hedging mandate and EUR exposure to hedge EUR exposure in longer-dated FX forwards.
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