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Pound Danish Krone (GBP/DKK) Exchange Rate Steadies despite Weak UK Construction Figures

Published: 2 Jul at 5 PM Tags: Pound Sterling, Euro Exchange Rate, Dollar Exchange Rate, Currency Exchange, Euro Crisis, UK, Exchange Rates, Economy,

The Pound Danish Krone (GBP/DKK) exchange rate fell by -0.2% today and is fluctuating around 8.3450kr on the interbank market.

Sterling (GBP) fell against the Danish Krone (DKK) following the publication of the UK construction PMI figures for June, which fell deeper into contraction from 48.6 to 43.1.

Tim Moore, an Associate Director at IHS Markit, was downbeat, saying:

‘The latest survey reveals weakness across the board for the UK construction sector, with house building, commercial work and civil engineering activity all falling sharply in June. Worrying signals from the survey's forward-looking indicators make it almost impossible to sugar-coat the Construction PMI data in June.’

Brexit concerns also heightened today, with both Tory leadership candidates – former London Mayor Boris Johnson and Foreign Secretary Jeremy Hunt – refusing to take a no-deal Brexit off the table.

Mr Johnson said that no-deal claims had been ‘wildly-over done’, coinciding with the chancellor Philip Hammond’s warning that a chaotic exit could cost the Treasury up to £90bn.

As a result many Sterling traders have become increasingly jittery.

Mark Carney, the Governor of the Bank of England, meanwhile warned that a global trade war could ‘shipwreck’ the global economy.

His return to a dovish tone has further weakened Sterling.

Mr Carney said:

‘Growth in the second quarter will be considerably weaker, in part due to the absence of that stock building effect and Brexit-related, temporary shutdowns by several major car manufacturers.’

The Danish Krone, meanwhile, failed to benefit from the printing of the Danish currency reserves figures for June, which eased from 451.7bn to 449.6bn.

Many DKK traders, however, are keeping a close eye on global trade developments, and with increasing doubts that the US and China could secure a trade deal, this has dampened hopes that European markets could benefit from a weakened US Dollar.

The Pound Danish Krone exchange rate will, however, remain driven by political developments this week.

Any further comments in favour of a no-deal Brexit could see the GBP/DKK exchange rate ease.