Why is there upward speculative pressure on the Danish krone?

  • Krone is "pegged" to the euro - so Danish Central Bank uses monetary policy tools to keep krone at a stable nominal rate to the euro.
  • Last month, in the face of huge inflows into the Swiss franc, the Swiss Central Bank abandoned their currency cap, and the franc appreciated massively.
  • Same happening with Danish Krone right now - large speculative inflows because of what happened in Switzerland and because ECB is about to start their QE (bond buying) program.

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