New Zealand Dollar / Danish Krone - NZD/DKK

On the Forex, the fluctuations of the NZD/DKK cross depend on the narrow link between the Danish national currency and the euro.

Since the creation of  the European single currency, and despite Danish people refused to join the euro area (according to a referendum of 2000) and the fact that Denmark is an historical member  of the EU (1973), the Denmark National Bank maintains its Krone in a very narrow fluctuation band (+/- 0,5 %) in relation with the euro.

The integration to the European convergence system ERM II is one of the reasons (even if the ERM II criterions are more flexible) of the choice of this monetary policy in Denmark.

So, we see on the Forex a strict similarity between the fluctuations of the NZD/DKK cross and the fluctuations of the EUR/NZD cross (or more precisely of the NZD/EUR cross), because the trend reversals take place at the same time and with the same proportions.

The structural data of these fluctuations are also the same, where predominated in the 2000s the very high key interest rate policy run in New Zealand and the link between the external value of the Kiwi and the world raw farm material exchange rates (40% of the New Zealand exports).

Following a bullish movement previously begun, the NZD/DKK cross had the exchange value NZD/DKK = 4,05 at the beginning of 2005 and it reached the higher of NZD/DKK = 4,7 during the Fall of 2005.

An adjustment happened until June 2006 (NZD/DKK = 3,5), then there was a new increase until the end of June 2007 (NZD/DKK = 4,25).

A clear decrease fast happened (NZD/DKK = 3,75 in September 2007) and lasted more slowly in 2008: the euro and the Danish Krone appreciated against the Kiwi in the context of the decrease of the raw material exchange rates and the worsening of the world financial and stock-exchange crisis.

From a lower of NZD/DKK = 3,0 reached in February 2009, the Kiwi fast re-appreciated against the Danish Krone and the Euro, gaining 25-26% against these two currencies in few months.

We had NZD/DKK = 3,7967 by mid-January 2010.