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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CZECHIA
- The Czech central bank may continue intervening in the market if the koruna comes under depreciation pressure as Governor Jiri Rusnok on Friday called levels of around 26 per euro a “pain threshold” for the currency’s weakness (BBG).
- EURCZK broke above the 25.50 level last week and has been oscillating between the 25.50 – 26 range in the past few days. A break above thee 26 level would bring us to the April 2021 highs.
- In addition to the FX interventions, the CNB is also likely to revised its terminal rate higher (as for other CEE) and therefore hike its policy rate more aggressively to ease the selling pressure on the domestic currency.
- However, the sharp tightening may also lead to a significant deterioration in the economic activity in the coming months.
- The chart below shows that aggressive tightening cycles have historically weighed on the the economic activity.
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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