Investing.com -- The Danish krone experienced a dip following disappointing clinical trial results from Denmark's pharmaceutical giant, Novo Nordisk (NYSE:NVO) A/S. The results have raised concerns over the potential impact on the Nordic nation's economy.
On Friday, the krone was trading at 7.4614 against the euro in Copenhagen, slightly down from 7.4592 prior to the release of Novo Nordisk's data. Despite the dip, the krone remained within the 7.2925 to 7.6282 range against the euro, as set by the central bank to maintain the currency peg. According to market analysts, there were no indications of an intervention in the currency market.
The decrease was triggered by data from Novo Nordisk, which revealed that patients using its experimental obesity drug, CagriSema, lost less weight than anticipated in a study. The news caused Novo's shares to plummet by as much as 29%, the largest drop on record, and dragged Denmark's benchmark OMXC25 index down by over 5%.
Kristoffer Kjaer Lomholt, head of FX research at Danske Bank (CSE:DANSKE) A/S, noted that the sell-off of Novo Nordisk is contributing to the strengthening of the euro against the Danish krone. He added that corporate sector flows, including those from pharmaceutical companies, have gained significant importance in recent years, particularly with the rise of Novo Nordisk.
Despite the dip, Lomholt highlighted that market volumes were thin due to the upcoming Christmas holiday and assured that there was no immediate need for an intervention in the market.
In recent years, Denmark's economy has become increasingly reliant on Novo Nordisk.
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