The Czech koruna felt weakness again
yesterday, but the losses were minimal.
Initially it quickly broke through the level
EUR/CZK 31.65 and even touched 31.685,
but it bounced back to 31.60 immediately. In
the rest of the day the currency was slowly
sliding down to close at 31.65 zone. The
koruna was under slight pressure despite
the recovery of all other central European
currencies. The market is likely still pricing
in diminishing chance for a rate hike in the
near future.
Today everyone may watch the central
bank. As we mentioned in last days, the
chance that the CNB Board would raise
interest rates is negligible. On the other
hand, we could hear some comments on
their growth and inflation outlook. However,
the outlooks and comments shouldn’t be
really surprising, thus the koruna may again
develop a sideways pattern.
A heated debate over a proposed
amendment to the central bank law to get
more influence over the NBH Monetary.
CSOB Investment research