January 22, 2015 / 3:22 PM / 3 years ago

Danish crown weakens after deposit rate cut

LONDON, Jan 22 (Reuters) - The Danish crown fell against the euro on Thursday after Denmark’s central bank cut its key interest rate for the second time in four days, taking it deeper into negative territory in a bid to ward off upward pressure on the currency.

The central bank lowered the certificate of deposit rate to a record low of -0.35 percent, from -0.2 percent, and said the rate cut followed intervention in the currency market. The cut came less than two hours after the European Central Bank announced a quantitative easing programme.

The crown weakened to 7.4457 crowns per euro from 7.4429 before rate cut, having fallen to 7.4540 earlier in the day because of intervention by the Danish central bank.

The central bank has been intervening this week, traders said, after buying 6.9 billion crowns ($1.1 billion) in the market between September and November 2014. An intervention often precedes a rate cut in Denmark, and many in the market had expected the bank to reduce rates after the ECB policy announcement.

Danish monetary policy moves in sync with the ECB and the currency peg with the euro is the cornerstone of Denmark’s economic policy. (Reporting by Anirban Nag; Editing by Jemima Kelly)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below