Euro-Breakup Scenarios Aid Danish Krone Allure in Binary Bet
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The appeal of the Danish krone is growing as securities denominated in the Nordic nation’s currency offer a hedge against the risk of a euro-area breakup that even German assets can’t provide.
“For an international investor with euro-zone exposure, buying Danish assets can be a hedge against the extreme scenario of the euro breaking up,” Ian Stannard, chief European currency strategist at Morgan Stanley in London, said in a phone interview. “In that scenario, the Danish asset may appreciate and work as a hedge against the drop in the euro-zone asset.”