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CZK Keeps Trending Higher

CZECHIA
  • Covid cases continue to gradually decrease with the 7D SMA of daily new cases dropping to 1,000 (down from 12,300 from its early March highs). As a result, The Czech Republic continues to ease pandemic restrictions as lower grades of primary schools resume full in-class learning and restaurants reopen outdoor seating areas.
  • CNB prepares for a tightening cycle with the first hike priced in for August (+25bps), followed by another 25bps hike in November; some sell-side institutions actually expect three hikes in H2. Hence, the expected increase in the policy rate has increased demand for the CZK, which trades at multi-year highs against the major crosses.
  • Today, Czech Premier Minister Andrej Babis meets with Serbian President Aleksandar Vucic.
  • There are no major economic data coming out today.

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