Krone Gains
The Danish currency climbed as high as 7.4614 per euro, compared with yesterday’s close of 7.4620. On March 26, it slid as low as 7.4671, its weakest since June 2006. The rate has averaged 7.4504 in the past five years, according to data compiled by Bloomberg. The spread, or difference in yield, between Denmark’s benchmark two-year note and its German equivalent, widened two basis points to seven basis points, the biggest margin since March 31.
“The Danish krone was strengthened against the euro this morning,” said Rasmus Gudum, an economist at Svenska Handelsbanken AB in Copenhagen, in a note. “It will be interesting to see how big the effect is on the krone in the coming period.”
Denmark has been forced to stray from its pattern of moving in lock step with the ECB during the global financial crisis as sudden shifts in capital flows test its currency peg.
The Danish central bank said earlier this week it had intervened in the currency market, purchasing kroner for a second month to support the exchange rate. Denmark doesn’t hold scheduled meetings and only changes rates to maintain its fixed exchange rate. It first resorted to negative rates in July 2012 after the nation’s status as a haven from Europe’s debt crisis triggered a sudden capital influx. Since then, investors have returned to markets in Europe’s core, reducing demand for debt sold by AAA-rated governments.
 
Krone Gains
The Danish currency climbed as high as 7.4614 per euro, compared with yesterday’s close of 7.4620. On March 26, it slid as low as 7.4671, its weakest since June 2006. The rate has averaged 7.4504 in the past five years, according to data compiled by Bloomberg. The spread, or difference in yield, between Denmark’s benchmark two-year note and its German equivalent, widened two basis points to seven basis points, the biggest margin since March 31.
“The Danish krone was strengthened against the euro this morning,” said Rasmus Gudum, an economist at Svenska Handelsbanken AB in Copenhagen, in a note. “It will be interesting to see how big the effect is on the krone in the coming period.”
Denmark has been forced to stray from its pattern of moving in lock step with the ECB during the global financial crisis as sudden shifts in capital flows test its currency peg.
The Danish central bank said earlier this week it had intervened in the currency market, purchasing kroner for a second month to support the exchange rate. Denmark doesn’t hold scheduled meetings and only changes rates to maintain its fixed exchange rate. It first resorted to negative rates in July 2012 after the nation’s status as a haven from Europe’s debt crisis triggered a sudden capital influx. Since then, investors have returned to markets in Europe’s core, reducing demand for debt sold by AAA-rated governments.
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