Due to the currency peg with the Euro, the value of the Krone is steered by the Eurozone. This means the USD to DKK rate is highly sensitive to any pressures on the Eurozone as a collective – or, indeed, any of the individual national economies within. For potential investors, it is worth noting announcements from the European Central Bank (ECB).
In terms of USD to DKK news, the same applies to Danmarks Nationalbank announcements. In reality, however, the Danish central bank typically mirrors ECB decision-making. It can even be argued that Denmark is already a de facto user of the Euro. But it is unable to influence factors that affect the USD to DKK rate as a result, which has led to political support for Euro adoption.
As of May 2018, Denmark meets the five criteria for Euro membership. But a lack of public and political support means there is currently no prospect of the country replacing DKK.
Denmark exports account for more than half of the national GDP, which traders must be aware of when trading the USD to DKK pair. It means that fluctuations in external demand for Danish goods/services will likely affect the value of the Krone. Germany, Sweden and the UK are main trading partners, but investors shouldn’t ignore the significance of US or Chinese demand.
For the US Dollar, its value can be positively or negatively affected in response to decisions by the Federal Reserve. Key US performance indicators to monitor if trading the USD to DKK pair include interest rates, GDP figures and employment data. The strength of currencies including the Euro or the stability of foreign Dollar reserves can also affect the USD to DKK rate.