Currency pair USDDKK
There is an opinion that in recent years the volatility of the main currency pairs on Forex has decreased radically.
Today, seeing a daily movement of 250 points in the euro/dollar is very rare, and, as a rule, caused by a strong news storm, which makes such jumps very unpredictable.
As you understand, a decrease in volatility and liquidity always leads to a decrease in the profitability of trading strategies.
Of course, you can overinflate the lot and achieve very high results by overestimating risks, but you can also go by using exotic currency pairs in your trading arsenal.
The USDDKK currency pair is one of the most popular exotic currency pairs, whose daily volatility can exceed 1,500 points.
On days of calm and a strong calm market, the price for this instrument manages to move 300-500 points, which allows the trader to use the same trend trading strategy as for the main market instruments to obtain increased profitability.
USDDKK is an asset that is formed by the American dollar and the Danish krone.
American dollar USD
The stability of the world's leading reserve currency is directly dependent on the macroeconomic performance of the US economy. In addition to well-known macroeconomic indicators such as GDP , the balance of trade, and unemployment data, industrial data has a very significant impact on the USD.
It's worth remembering that the US is the world's largest oil consumer, so as oil prices fall, the dollar typically appreciates. However, it's worth noting that at the end of 2015, the US president lifted the 40-year ban on oil sales.
In addition to obvious macroeconomic indicators, the stability of the dollar is influenced by stability in the regions of its main trading partners. For example, the collapse of the Chinese stock market dealt a significant blow to the prices of major US stocks and indices, which was reflected in the dollar.
Danish krone. DKK
Denmark is a full member of the European Union, but the country abandoned the euro, the single European currency, and retained its own Danish krone. Denmark's economy is one of the most stable in the world. This small, prosperous country's success is due to its strong agricultural and industrial sectors.
Therefore, the stability of the Danish krone is greatly influenced by global prices for consumer goods and components. Denmark has a highly developed service sector, so its employment figures are the envy of even advanced countries. It's worth noting that rising unemployment figures have a significant impact on the Danish krone, as this is not a typical problem for the country. Denmark's stability and energy independence are ensured by its large oil and gas reserves.
Therefore, as oil prices fall, a pattern can be observed in the decline of the Danish krone. However, while the country is fully self-sufficient in gas and oil, it faces significant shortages in other extracted raw materials. Therefore, when raw material prices for production increase on global commodity markets, the Danish krone declines sharply. When analyzing the Danish krone, it is important to pay particular attention to key macroeconomic indicators, interest rates , and tax data.
It's worth noting that taxes in Denmark are very high, so the slightest hint of a tax cut leads to a rapid rise in the Danish Krone (DKK), as foreign investors begin investing aggressively. The DKK's exchange rate is highly dependent on the stability of trading partner countries. The main trading partners are the European Union, so if the euro begins to weaken, the Danish Krone (DKK) rapidly follows suit.
Overall, USDDKK is easy to forecast if fundamental indicators are used correctly, with the dollar being the primary focus. The highest activity occurs during the American and European trading sessions.
Despite its high volatility, USDDKK is not suitable for scalping due to its very high spread. When choosing a broker to trade this instrument, it's best to choose accounts with floating spreads .
