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    EUR/DKK to stay low over 2016 - Danske Matías Salord

    Analysts from Danske Bank forecast that the EUR/DKK pair will stay low over the coming year at 7.4375 in 1-12M and look for the Danish central bank to cap the pair around 7.4350 using intervention.Key Quotes:“We forecast EUR/DKK will stay low over the coming year at 7.4375 in 1-12M and look for DN to cap EUR/DKK around 7.4350 using FX intervention.”“Furthermore, we expect DN to keep the rate of interest on certificates of deposits unchanged at minus 0.65% on 12M. However, if the need to sell DKK in FX intervention accelerates, DN may opt to cut to minus 0.75% – a level we still view as the lower bound for the key policy rate in Denmark.”“If the European Central Bank decides to cut its deposit rate further, we look for DN to mirror this move down to minus 0.75%. Finally, DN has room to buy back around DKK30bn in DGBs given the current outlook for government finances.” 


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