First Post-Brexit Currency Intervention Draws Denmark’s Red Line
- Danish central bank sells kroner for first time since June
- Nordea sees key rate at current negative level till end 2018
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The world-record holder in negative rates conducted its first currency interventions since June, when Denmark was fighting back a flight to safety triggered by Britain’s vote to leave the European Union.
The Danish central bank’s decision to weaken its currency by selling 700 million kroner ($100 million) in direct interventions is, though small in size, “a clear signal to the market that it can go this far and no further” in driving up the value of the krone, Tore Stramer, chief economist at Nykredit in Copenhagen, told clients in a note.