The Danish krone (DKK) is considered to be an exotic currency in the Forex market.
The most important thing you need to know about the Danish krone is that it is pegged to the euro (EUR) at 7.46 kroner per euro.
Trade Surplus or a Trade Deficit
Denmark runs a trade surplus of $14.35 billion, giving the country a ranking of 21 out of the 190 countries tracked by the CIA in The World Factbook (CIA.gov).
What Does Your Economy Export?
Denmark exports machinery, instruments, meat and meat products, dairy products, fish, pharmaceuticals, furniture, and windmills.
According to the World Trade Organization (WTO), Denmark exports $93.3 billion in goods and merchandise compared to only $55.0 billion in commercial services. The WTO breaks down those exports as follows:
Goods and Merchandise
- Agricultural products: 22.2 percent
- Fuels and mining products: 10.2 percent
- Manufactures: 64.9 percent
Commercial Services
- Transportation: 61.5 percent
- Travel: 11.6 percent
- Other commercial services: 27.0 percent
To Whom Does Your Economy Export?
The WTO ranks the following countries as the top destinations for exports from Denmark:
- European Union: 61.5 percent
- Norway: 6.2 percent
- United States: 5.4 percent
- China: 2.1 percent
- Japan: 1.5 percent
What Does Your Economy Import?
Denmark imports machinery, equipment, raw materials, semi-manufactures for industry, chemicals, grain, foodstuffs, and consumer goods.
According to the WTO, the country imports $82.9 billion in goods and merchandise compared to only $51.0 billion in commercial services. The WTO breaks down those imports as follows:
Goods and Merchandise
- Agricultural products: 16.2 percent
- Fuels and mining products: 7.9 percent
- Manufactures: 74.2 percent
Commercial Services
- Transportation: 51.1 percent
- Travel: 18.1 percent
- Other commercial services: 30.8 percent
From Whom Does Your Economy Import?
The WTO ranks the following countries as the top sources of imports to Denmark:
- European Union: 69.9 percent
- China: 6.5 percent
- Norway: 5.3 percent
- United States: 3.4 percent
- Singapore: 1.9 percent
Do You Have an Attractive Government Debt Market?
Denmark currently has a Moody’s rating of Aaa. It received this latest rating on August 23, 1999. This most recent rating was an upgrade from the Aa1 rating that the country had held previously. ‘Ibis is a positive sign for the country’s government debt market (www.moodys.com).
Do You Have an Attractive Equities Market?
Denmark has an attractive equities market, but it is not very large. It is the thirty-first largest equities market in the world, with a total market value of $186.9 billion (CIA.gov).
Central Bank Mandate
Danmarks Nationalbank is responsible for monetary policy in Denmark. The objective of monetary policy is to keep the krone stable vis-a-vis the euro. Danmarks Nationalbank conducts monetary policy by setting the monetary policy interest rates, that is, the discount rate, the current-account rate, the lending rate, and the rate of interest on certificates of deposit. The interest rates are determined by the Board of Governors of Danmarks Nationalbank, and can be changed as required at any time.
The Danmarks Nationalbank has foreign currency reserves of $64,398 million and gold deposits of $3,017 million.
Government Intervention in Forex
The Danish government is not known as an aggressive currency manipulator.
Important Economic Announcements
When you are watching the economic announcements coming out of Denmark, make sure that you keep your eye on the following:
- Interest rates
- Employment
- Inflation
- Gross domestic product (GDP)
- Trade balance
Are You a Safe-Haven Currency?
No, the Danish krone is not considered to be a safe-haven currency.
How Can I Trade You?
You can trade the Danish krone using any of the following:
- Spot Forex
- Forex futures
- Spot Forex options
