The CAD/DKK currency pair is not really popular among the traders of Forex market. This pair is the cross rate against the U.S. dollar. Although there is no U.S. Dollar in this currency pair, the CAD/DKK pair is under considerable influence of it. To make it clear, just combine two charts (CAD/USD and USD/DKK) in the same price chart and you will get an approximate the CAD/DKK chart.
The U.S. dollar affects both currencies deeply. That is why for better forecasting the future CAD/DKK rate, it is necessary to pay attention to the main economic indicators of the U.S. There are some indicators such as the interest rate, GDP, unemployment, new workplaces indicator and many others. These two currencies can react differently to the U.S. economy changes.
The world oil prices have a great influence on the Canadian dollar. As you know, Canada has the status of one of the largest world exporters of oil. So when the oil price is getting higher, the Canadian dollar value is also increasing, and vice versa. The fact speaks for itself: the CAD/DKK currency pair is directly dependent on the world oil prices.
Denmark is known as prosperous country with developed industrial and agricultural sectors. Its economic indicators are one of the highest in the world. Despite of the Danish large oil and gas reserves (in Jutland and in the North Sea), it is still dependent on export of other mineral resources. Denmark has stable economic and trade relationships with all the developed countries, mostly with the EU ones. They lead the active trade in machinery, electronics, agriculture, mining, etc.
That fact that the economy of Denmark is one of the strongest in the world allows the Danish krone to be stable in pairs with other major currencies on Forex market. There are some factors strengthening the Denmark economy such as low inflation and unemployment rates, large oil and gas reserves, high technology and highly qualified specialists in economic fields.
The economy of Denmark has one of the highest levels, but there are still some factors that make it weaker, such as high taxes and deterioration of the competitiveness on the world market. Traders working with this currency pair should take into account some economic indicators like prices for oil and for other minerals that can influence Denmark production.
Keep in mind that the spread for cross currency pairs can be higher than for popular ones. So before you start dealing with the cross rates, learn carefully broker’s conditions of trading with specified trade instrument.
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