Denmark Hikes Rates As Draghi's "Hawkish" Ease Relieves Peg Pressure
When Mario Draghi “disappointed” markets in December by “only” cutting the depo rate by 10 bps and “merely” extending PSPP by six months while electing not to expand monthly asset purchases, the Riksbank, the Nationalbank, the Norges Bank, and the SNB all breathed heavy sighs of relief.
Essentially, Denmark, Sweden, Switzerland, and Norway are beholden to Mario Draghi. When the ECB eases, those countries’ central banks must ease as well or risk falling behind in the global currency wars.
