Pound Sterling / Danish Krone - GBP/DKK

While Denmark is a historical member of the EU and joins the convergence system ERM II (Exchange Rate Mechanism II), without wanting to join the euro area (following a special dispensation obtained by Denmark after the “no” of its citizens to the Maastricht Treaty), the Denmark National Bank has been maintaining its national currency in a narrow fluctuation band (+/-0.5%) in relation with the euro.

So the exchange value EUR/DD= 7.4437 observed at the end of 2009 is very close to the value 10 years before.

So the fluctuations of the GBP/DKK cross is similar to the fluctuations of the GBP/EUR cross or more precisely to the fluctuations of the EUR/GBP cross as it is quoted on the Forex.  

We have to remember that the euro lost ground against the Pound Sterling until the end of 2007 (as the cross GBP/EUR was next to GBP/EUR = 2), before an important trend reversal happened in the context of the financial crisis which frontally concerned the City more than the other financial places in the world during the year 2008 (GBP/EUR = 1by the end of 2008).

Pour the GBP/DKK cross, a higher was observed in February 2007 at GBP/DKK = 11,3 (in comparison with  GBP/DKK = 10,7 at the beginning of January 2005); then a decrease amplified in 2008 and that led to a lower of GBP/DKK = 8 in December 2008: so the Danish krone appreciated by 30% against the British currency in a year and a half.

An adjustment happened during the first quarter of 2009, and the GBP/DKK cross reached again the exchange value GBP/DKK = 8,5 (so the EUR/GBP cross which decreased at EUR/GBP = 0,84 in July 2009) but this adjustment was moderated by a new decrease of the Pound against the Euro, but also against the Danish krone, which is very pegged with the euro: GBP/DKK = 8,3845 by mid-January 2010.