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Continuous fall of the Danish kroner - GOOD OR BAD?

Thursday, 26 July 2012
The Danish Krona continues to fall signifying the economy still struggling to gain a head wind. A Danish Krone currently costs aboutSkr1.13. This is the lowest price the currency has fetched against its Swedish counter part since the Öresund Bridge opened in the 2000s.

One good thing here is a reverse trend where more Swedes will surely be flooding into Denmark to do shopping according to media reports in Sweden. The reverse is because in the past 10 years it had been more Danes coming to Sweden to buy most including Swedish properties that were more competitive then while Denmark saw its own house prices go over the roof.

Therefore when the bridge was opened in 2000, the Danish krone had some what fluctuated around Skr1.13.
Analysts say it is the same ratio that prevailed in July this year. On Wednesday, the cost of 1Dkr was Skr 1.13. The Danish krone has thus dropped 5 percent from year-end against the Swedish krona and a massive 20 percent over the past three years.

The Danes now hope that the Swedes will take over the Oresund bridge region and shop until they drop encouraged by the prospects to make strong bargains.

"Recognition of the strong Swedish krona has not yet fallen into place, "says Karsten Karsten Längerich, director of consumer market in the Oresund region to the paper, Sydsvenskan.

"There is an image of Copenhagen as an expensive place held by many Swedes here. In the wake of the crisis in the Danish retail trade I would argue that there are many bargains to be had in Denmark right now, "says Karsten Längerich.

Not long ago the Danish business daily, borsen reported that the Danes, not least because of the increasingly expensive Swedish krona, are becoming less likely to buy the Swedish summer. The trend now is "stagnant" because in some some years until 2007 it was "explosive" that the Danes will get on their bikes and move to Sweden in the summer.

Thus the Swedes who went to the Roskilde Festival earlier in July, could rejoice in having a little bit more money left over for beer and food than usual because of the favourable exchange rate.

In Skåne, southern Sweden, which is very close to Denmark, there are some places with ATM machines where one can directly switch to the Danish krone, reports Sydsvenskan as a tip to Swedish shoppers, speaking of the fees that banks and money exchange companies are charging.
by Team

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