Senior Analyst at Danske Bank Sverre Holbek, expects the cross to return to the 7.44 region in the next weeks.
“There was limited reaction in EUR to the strong backing to Emmanuel Macron’s party in the French parliamentary election yesterday. It illustrates to us that the boost to EUR from the decline in political uncertainty in euro area has faded”.
“In particular it is noteworthy that EUR/DKK is trading with a heavy tone and yesterday reached the lowest level in over a month of around 7.4350-60 not far from Danmarks Nationalbank’s recent intervention level around 7.4330-40”.
“We doubt that we are headed for a new period of downwards pressure on EUR/DKK and should see the pair recover to around 7.4400. The recent weak stock market performance could be a near-term supportive factor if it leads domestic investors to rebalance their FX hedge ratios”.