Why the Danes could see another currency run...
Pegs attract raiders as they are anomalies in the market dynamics.
Pegs attract raiders as they are anomalies in the market dynamics.
Interest rates in Denmark have continued to fall, to historical lows, and the low level of interest have not triggered investment activity. The commodity prices grain, pigs and milk have adversely affected Denmark. .
There is thus going to be just about speculative financial activity.
In a sudden reversal charge: there could be an international hunt for Danish crown; it would be overwhelming for this small nation.
Danish crown could
rise and counter party euro prices might plummet.
the trend may be intensified by sales orders in
euro;
there could be some queues at the entry;
there could be knock-on effect across asset classes in Europe.
There could be direct losses in the global market due to these price adjustments for Danish financial assets.
Views expressed without any risk or responsibility.
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