On Wednesday, CE currencies experienced yet another calm session and were trading barely changed ahead of the Fed meeting. However, in late evening, the Fed’s announcement it anticipates very low rates through late 2014 - that is, 1.5 years beyond mid 2013, the previous conditional promise of the Fed - sparked a modest market reaction and the CE currencies posted some gains (for more on the FOMC meeting click here). As a result, the Polish zloty is seen at the strongest level in almost 5 months.
Meanwhile, the Czech government announced it would lend EUR 1.5 billion to the IMF, i.e. about 40 percent of funds originally asked by the EU. We consider such amount as bearable.
Apart from the announcement, the Czech central banker Janacek said he would prefer interest rates to stay unchanged for now. Let us remind that Janacek is seen as a member of a hawkish camp among the Czech central bankers. With regards to previous comments of his fellow central banker Zamrazilova (she said she would vote for a hike only if she had persuaded another member of the board to support her view), it seems that the decision to keep interest rates unchanged might be supported unanimously at the meeting being held next Thursday.