16 Apr 2021 22:26
DKK/JPY is not a popular currency pair on the Forex market. DKK/JPY is the cross rate versus the U.S. dollar. Although the U.S. dollar is not obviously present in this currency pair, it still has a significant influence on it. This can be viewed, if you combine the two charts: USD/JPY and USD/DKK. By means of combining these two charts in the same price chart, you can get an approximate DKK/JPY chart.
The U.S. dollar has a strong impact on both currencies. For this reason, it is necessary to take into account the major U.S. economic indicators for the correct forecast of a future rate of this financial instrument. These data include: the discount rate, GDP, unemployment, new vacancies and many other. It is important to note that the currencies under consideration could respond to the changes in the U.S. economy at different pace. Therefore, DKK/JPY currency pair can be considered as a specific indicator of changes in these currencies.
Denmark is actively trading with the UK, its largest business partner. Denmark is a highly developed industrial-agrarian country with one of the best economic indicators in the world. This nation is rich in oil reserves that are mainly concentrated in the southern part of Jutland and on the shelves of the North Sea. However, the country is poor in minerals, which makes it reliant on imports. Denmark enjoys a durable economic relationship with all the developed countries of the world. It actively trades machinery, electronics, agriculture, mining, etc. Denmark's main trading partners are the EU countries.
Denmark has one of the most powerful economies in the world, which allows its currency to remain stable in pairs with other majors. The strong points of Denmark's economy are low inflation and unemployment, the presence of major oil and gas reserves on the North Sea shelf and in the south of Jutland, the high level of high technology development and competent professionals in all sectors of the economy.
Although Denmark has one of the most robust economies, its weaknesses are high taxes and decreasing competitiveness on world markets. If you trade GBP/DKK, you should focus on economic indicators of Denmark, as well as on the prices of oil and minerals needed to sustain Denmark's production.
The currency pair DKK/JPY is quite vulnerable to a variety of major political events and economic trends taking place in the world. That is why the price chart for the currency pair is hardly predictable, and the rate often goes in the opposite direction regardless of any analysis.
It is not advisable for novices to start their trading with the above-mentioned currency pair on the Forex market. To successfully trade this financial instrument, you need to know a lot of nuances of the price fluctuations.
If you trade cross rates, it is necessary to remember that brokers usually set a higher spread on this particular pair than on other more popular currency pairs. So, before you start working with the cross rates, you have to consider carefully the conditions offered by the broker.