Denmark Goes More Negative

The dramatic move by the Swiss National Bank shook up currency traders. Now it’s Denmark’s turn. After all, they face the same pressures from the ECB. The Nationalbank, Denmark’s Fed, cut rates on CDs to -0.2% from -0.05%.

Both the Swiss and Danish authorities, trying to keep their currencies — and exports — globally competitive, acted pre-emptively before a meeting of the European Central Bank on Thursday in Frankfurt. At that meeting, the bank’s policy makers are widely expected to announce a program of large-scale bond buying, an action that could further push down the value of the euro, which has been weakening for months.

A weakening euro has the effect of making other European currencies, like the Swiss franc and Danish krone, relatively stronger — which effectively raises the prices of products priced in francs or kroner on the global market.

Posted by on January 20th, 2015 at 10:49 am


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.