16 Apr 2021 23:59
GBP/DKK is a currency pair traded on Forex. Traders choose this trading instrument for high stability and predictability of the eurozone and Denmark economies. The most intense bidding on GBP/DKK occurs during trading sessions at European stock exchanges.
GBP/DKK is a cross rate against the U.S. dollar. Even though the U.S. dollar is not obviously present in this currency pair, it still considerably influences it. It is easy to see combining the GBP/USD and USD/DKK charts. The result of the combination is an approximate GBP/DKK chart.
Because the U.S. dollar has a significant influence on both currencies, for the correct forecast of a future GBP/DKK course it is essential to take into account the major U.S. economic indicators (discount rate, GDP, unemployment, new vacancies, etc.). It should be noted that the discussed currencies could respond to changes in the U.S. economy with different speed, so the GBP/DKK currency pair may be a specific indicator of change 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.
If you trade cross rates, you should remember that brokers tend to set a higher spread for this currency pair, than for more popular currency instruments. That is why before you start working with cross rates, carefully learn the conditions offered by the broker you chose to trade with.