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CZK: Koruna Draws Support From Expectation-Beating CPI Data

CZK
EM BulletCzech RepublicCentral and Eastern EuropeBulletGlobalEmerging Market NewsRegionCzechia

The koruna appreciated following the release of hawkish Czech CPI data, with EUR/CZK last quoted -0.029 at 25.307 (per Bloomberg feed). Bears look for a sustained sell-off past the 50-DMA, which kicks in at 25.162. Conversely, a break above a series of recent highs located just shy of 25.4 would bring Aug 1 cycle high of 25.535 into view.

  • As the data hit the wires, EUR/CZK knee-jerked lower on the Bloomberg feed, bottoming out as low as at 25.138, before promptly retracing most of this swing. Note that the move did not appear on Reuters EUR/CZK feed.
  • Czechia's CPI inflation printed at +2.6% Y/Y, exceeding the consensus forecast of +2.4% and the CNB's projection of +2.3%. The forecast range in Bloomberg's poll was +2.3%-2.8%, which means all surveyed analysts expected an acceleration.
  • On the M/M basis, prices fell by 0.4%, slightly less than the expected 0.5%. This comes after a 0.3% uptick recorded in August.
  • Above-forecast acceleration in headline inflation may provide another argument for those Bank Board members who prefer to err on the side of caution.
  • The CNB will release comments from its analytical staff later in the day alongside a detailed breakdown of inflation data.
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The koruna appreciated following the release of hawkish Czech CPI data, with EUR/CZK last quoted -0.029 at 25.307 (per Bloomberg feed). Bears look for a sustained sell-off past the 50-DMA, which kicks in at 25.162. Conversely, a break above a series of recent highs located just shy of 25.4 would bring Aug 1 cycle high of 25.535 into view.

  • As the data hit the wires, EUR/CZK knee-jerked lower on the Bloomberg feed, bottoming out as low as at 25.138, before promptly retracing most of this swing. Note that the move did not appear on Reuters EUR/CZK feed.
  • Czechia's CPI inflation printed at +2.6% Y/Y, exceeding the consensus forecast of +2.4% and the CNB's projection of +2.3%. The forecast range in Bloomberg's poll was +2.3%-2.8%, which means all surveyed analysts expected an acceleration.
  • On the M/M basis, prices fell by 0.4%, slightly less than the expected 0.5%. This comes after a 0.3% uptick recorded in August.
  • Above-forecast acceleration in headline inflation may provide another argument for those Bank Board members who prefer to err on the side of caution.
  • The CNB will release comments from its analytical staff later in the day alongside a detailed breakdown of inflation data.