EUR/DKK spot continues to trade well above the central rate of 7.46038 following the 10bp rate hike from Danmarks Nationalbank last week.
On a 3M horizon, the market pricing further ECB easing, a lower DKK net position due to large tax payments and the risk of a DN rate hike are set to weigh on EUR/DKK.
We forecast EUR/DKK at 7.4550 on 1M-12M and recommend Danish pension funds with EUR exposure and a hedging mandate to hedge EUR exposure using FX forwards either in the short end (1M-3M) or in longer-dated forwards (from 2Y).
To read the entire report Please click on the pdf File Below