Abandoning Denmark's currency peg would deprive the country's businesses of the stable environment on which they're accustomed to basing their strategies and forecasts, said Peder Holk Nielsen, chief executive officer of Novozymes A/S, the world's biggest industrial enzyme producer.

“For our company, the main thing is that the krone is stable versus the euro,” he said in an interview at his office outside Copenhagen.

FLSmidth & Co. A/S, the world's biggest maker of cement production plants, says one can't compare Denmark's euro peg with the former Swiss regime.

“It's much stronger with a longer history, and the ECB is supporting the peg,” Pernille Friis Andersen, a senior vice president at the Copenhagen-based company, said by phone. “In the current situation with the krone strengthening, the currency peg is definitely an advantage.”

The central bank fought back speculation it might run out of ammunition to defend its peg by delivering a surprise rate cut on Monday, lowering its benchmark deposit rate to minus 0.2 percent. Danske Bank A/S, the country's biggest lender, says the rate may be cut again tomorrow, to minus 0.3 percent as the ECB prepares to unveil the details of its bond-purchase program.

Danske, Nordea

Danske and Nordea Bank AB, Scandinavia's biggest bank, both say it's pointless to speculate against Denmark's currency peg. It's a message they say they've passed on to hedge funds calling in the hope of profiting from currency market turmoil. Even international banks, including Goldman Sachs Group Inc. and Citigroup Inc., argue the current Danish currency regime is unlikely to fall.

The central bank says it will do whatever it takes to defend the peg, which can include non-standard measures.

Denmark relies on trade with the European Union for about 70 percent of its total exports, meaning the country's de facto euro membership saves its companies billions in exchange-rate hedges.

“Like many big companies in Denmark, we have a relatively large cost base and relatively small income in Danish kroner,” Holk Nielsen said. “If there were a decision to abandon the current peg, it probably wouldn't be replaced by a new one.”

If businesses were forced to exist under a floating currency regime, that would create “instability and unpredictability” making it “more difficult to run operations,” he said.

The Danish central bank targets a krone rate of 7.46038 against the euro, inside a 2.25 percent band. In practice it only allows swings of no more than 1 percent around the tolerance band.

Business Minister Henrik Sass Larsen said yesterday the government has full faith in the central bank's ability to do what's needed to defend the peg.

“It's difficult to find someone in Denmark who's against the fixed-currency policy,” Rasmussen said.

–With assistance from Peter Levring in Copenhagen.

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