Denmark warns over pressure on krone

Article reported that the head of Denmark’s central bank warned in June 2012 that the Danish krone was coming under intense pressure from investors seeking a haven in Europe and betting that the currency’s peg to the euro could be cracked by the crisis.

Nils Bernstein, the governor of the Danish central bank, said that the upward pressure on the krone was the most severe he had seen in his seven years as governor, and warned that negative interest rates could be on the cards if the problem continues.

Investors were pouring money into Danish bonds attracted by the country’s narrow budget deficit and current account surplus, leaving it fighting to maintain the very narrow peg with the euro it has held since 1999.