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22 Jan 2015
USD/DKK rises to highest since Nov 2003
FXStreet (Mumbai) - The USD/DKK pair extended gains to trade at the levels, last seen in November 2003 after the Danish Central Bank cut interest rates for the second time this week.
The pair now traded 1.39% higher at 6.4939 levels at the time of writing, compared to the previous session’s close at 6.6043 levels. The Danish Central bank reduced interest rates after the European Central Bank announced an expansion of its asset purchase program earlier today. In an unscheduled statement, the central bank announced that, effective from 23 January 2015, the interest rate on certificates of deposit is reduced by 0.15 percentage points.
The pair had already rose closer to 11-year highs as the Danish central bank intervened in the fX markets in order to avoid upward pressure on its currency against the EUR.Markets were expecting a rate cut since evidence shows that an intervention often precedes a rate cut in Denmark. Thus, the significant weakening of the DKK is not seen post rate cut since markets had already priced-in the move.
USD/DKK Technical Levels
The immediate resistance is seen at 6.5175 (June 2003 high), above which the pair could test 6.5347 (Nov 2003 high). Meanwhile, support is seen at 6.4860 and 6.4417 levels.
The pair now traded 1.39% higher at 6.4939 levels at the time of writing, compared to the previous session’s close at 6.6043 levels. The Danish Central bank reduced interest rates after the European Central Bank announced an expansion of its asset purchase program earlier today. In an unscheduled statement, the central bank announced that, effective from 23 January 2015, the interest rate on certificates of deposit is reduced by 0.15 percentage points.
The pair had already rose closer to 11-year highs as the Danish central bank intervened in the fX markets in order to avoid upward pressure on its currency against the EUR.Markets were expecting a rate cut since evidence shows that an intervention often precedes a rate cut in Denmark. Thus, the significant weakening of the DKK is not seen post rate cut since markets had already priced-in the move.
USD/DKK Technical Levels
The immediate resistance is seen at 6.5175 (June 2003 high), above which the pair could test 6.5347 (Nov 2003 high). Meanwhile, support is seen at 6.4860 and 6.4417 levels.