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Economists at Rabobank analyzes which steps Denmark’s National Bank (DNB) can take and forecast the outlook for the EUR/DKK pair.

Key quotes

“In 2020 as a whole, GDP growth is estimated by the government to fall between 3 and 10%.” 

“If investor demand for Danish debt assets settles, the DNB is likely to be able to avoid further policy action to stabilise the EUR/DKK peg. This still depends on the depth and the length of the economic crisis.”

“For now, EUR/DKK could stabilise close to the 7.46 level, at the centre of its fluctuation band.” 

“If May passes without further intervention from the DNB, talk of any further rate hikes will further diminish.”