20 Jan 2021 00:32
AUD/DKK is not a widespread currency pair on the Forex market. AUD/DKK is the cross rate against the US dollar. Although the US Dollar is not in this currency pair, it has a significant influence on it. It can be seen if you combine two charts: AUD/USD and USD/DKK. Thus, you can get an approximate AUD/DKK chart.
The US dollar has a significant influence on both currencies. That is why it is necessary to take into account the major US economic indicators in order to forecast correctly the course of this financial instrument. These indicators are as follows: the discount rate, GDP, unemployment rate, Non-Farm Payrolls, etc. It is necessary to note that discussed currencies could respond with different speed on changes in the US economy, therefore AUD/DKK currency pair may be a specific indicator of these currencies changes.
Denmark has a modern, prosperous, and developed mixed market economy; it is one of the most competitive economies in the world. Denmark has large oil reserves in the southern part of Jutland, as well as on the shelves of the North Sea, but there is lack of other resources, making it dependent on export. This Scandinavian country has strong economic relations with all the developed countries and it leads an active trade in machinery, electronics, agriculture, mining, etc. Denmark's main trading partners are EU countries.
Denmark has one of the strongest economies in the world that allows its currency to be stable in pairs with other major currencies on the Forex market.
The strong points of the economy in Denmark are low inflation and low unemployment rate, the presence of major oil and gas reserves in the North Sea shelf and in the south of Jutland, the high level of development in high technology and the presence of competent professionals in all areas of the economy.
Although Denmark has one of the highest levels of the economic development, the negative sides of its economy are high taxes, as well as low competitiveness. It may cause the drop of the currency. If you operate this trading instrument, you should focus on Denmark’s economic indicators, as well as the price of oil and other resources used in industrial production.
This trading instrument is relatively illiquid if we compare it with major currency pairs, such as EUR/USD, USD/CHF, GBP/USD, and USD/JPY. Therefore, when you make a forecast of this financial instrument, you should primarily focus on those currency pairs that include US dollar along with each of the considered currencies.
If you trade cross rates, it is necessary to remember that brokers are usually set a higher spread than for more popular currency pairs, so before you start working with the cross rates, you should carefully read the conditions offered by the broker to trade with specified trade instrument.