Danish krone stages biggest fall vs euro since 2001

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The Danish krone has suffered its biggest fall against the euro since 2001, after the
head of Denmark's Economic Council was reported to have said that the country's
central bank would defend its currency peg "to the last drop of blood".
The krone - which trades only within a narrow band against the euro because of the
peg - is down 0.23 per cent at 7.4615, having weakened to 7.4645 earlier. According
to Bloomberg, today's slide represents the biggest intra-day fall since 2001.
Denmark has fixed its krone to the euro at a rate of about 7.46 since 1999. The peg,
however, has come under increasing pressure as the euro has slumped over the past
half year.
After the Swiss National Bank scrapped its own franc ceiling against the euro earlier
this year, all eyes turned to whether Denmark would follow suit.
Hans Jorgen Whitta-Jacobsen, head of Denmark's Economic Council, which advised
the country's government, called the currency peg a "holy policy" in an interview with
Reuters.
He said Denmark's central bank "can use tools it has already used to an
unimaginably higher degree" to defend the peg. If they fail, the central bank could
resort to buying Danish securities or other tougher methods to defend the peg "to the
last drop of blood", he said.

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