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CZK: Koruna On Back Foot Along CE3 Peers Ahead Of Today's CNB Rate Decision

CZK
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EUR/CZK has ticked higher ahead of the announcement of the CNB's rate decision, with the koruna depreciating alongside its regional peers. The CZK outperforms other CE3 currencies (PLN/CZK -0.1%; CZK/HUF +0.1%). EUR/CZK last trades +0.035 at 25.116 and bulls look for a move through the 50-DMA, which kicks in at 25.175. Conversely, the initial layer of support has been defined at 25.0.

  • The CNB is widely expected to cut interest rates by 25bp today, with several Bank Board members guiding the market towards such an outcome in the recent weeks. With a quarter-point cut baked in, and another one seen in November, the focus will be on Governor Michl's rhetoric as market participants are trying to gauge the odds of another cut in December. The CNB's decision comes on the heels of the Hungarian central bank's decision to trim rates by 25bp.
  • PM Fiala's decision to sack Regional Development Minister Ivan Bartos triggered a crisis in the governing coalition, alienating the Pirate Party which lambasted the PM for failing to mention his plans during an earlier face-to-face meeting with Bartos. The Pirates have not yet announced their exit from the government, but their stand-off with Fiala may complicate cabinet budget talks scheduled for today.
  • CZGBs are lower across the curve as we type. The PX Index sits marginally above neutral levels.
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EUR/CZK has ticked higher ahead of the announcement of the CNB's rate decision, with the koruna depreciating alongside its regional peers. The CZK outperforms other CE3 currencies (PLN/CZK -0.1%; CZK/HUF +0.1%). EUR/CZK last trades +0.035 at 25.116 and bulls look for a move through the 50-DMA, which kicks in at 25.175. Conversely, the initial layer of support has been defined at 25.0.

  • The CNB is widely expected to cut interest rates by 25bp today, with several Bank Board members guiding the market towards such an outcome in the recent weeks. With a quarter-point cut baked in, and another one seen in November, the focus will be on Governor Michl's rhetoric as market participants are trying to gauge the odds of another cut in December. The CNB's decision comes on the heels of the Hungarian central bank's decision to trim rates by 25bp.
  • PM Fiala's decision to sack Regional Development Minister Ivan Bartos triggered a crisis in the governing coalition, alienating the Pirate Party which lambasted the PM for failing to mention his plans during an earlier face-to-face meeting with Bartos. The Pirates have not yet announced their exit from the government, but their stand-off with Fiala may complicate cabinet budget talks scheduled for today.
  • CZGBs are lower across the curve as we type. The PX Index sits marginally above neutral levels.