Exchange Rate Systems and Cross Currency Pricing in 2025 and 2026
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This paper compares the euro exchange rates of the Danish krone, US dollar, and pound sterling over 438 European Central Bank (ECB) observation dates from 2 January 2025 to 18 September 2026. It combines descriptive statistics with a cross-currency pricing exercise and a discussion of trade adjustment. The standard deviation of daily log changes was 0.98 basis points for EUR/DKK, 44.23 for EUR/USD, and 25.93 for EUR/GBP. One euro gained 0.23% in kroner, 11.04% in dollars, and 3.32% in pounds over the sample. The implied dollar price of one pound increased from 1.2417 to 1.3344. These results are consistent with a stable krone against the euro, but they do not isolate the causal effect of exchange-rate policy. A triangular conversion built entirely from the same reference rates returns the starting amount by construction and cannot demonstrate an executable arbitrage profit. The Marshall–Lerner condition provides a framework for discussing trade adjustment, although trade elasticities are not estimated. The analysis shows how reference rates support currency comparisons and valuation while identifying the additional evidence needed for trading and trade-balance conclusions.
Keywords
Cross-Currency Pricing, Danish Krone, Euro, Exchange-Rate Systems, Marshall–lerner Condition, Triangular Arbitrage