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CZK: Koruna Weakens, CNB Minutes Under Scrutiny

CZK
EM BulletCzech RepublicCentral and Eastern EuropeBulletGlobalEmerging Market NewsRegionCzechia

EUR/CZK trades +0.045 at 25.365 and familiar technical levels remain in play. The initial bullish target is provided by Aug 1 high at 25.535, while bears look for losses towards the recently breached 50-DMA, which kicks in at 25.167.

  • CNB minutes revealed that Tomas Holub was the dovish dissenter who backed a 50bp rate cut last week, while the rest of Bank Board members voted for a 25bp move. Jan Frait also said that a 50bp cut would be consistent with his assessment of the medium-term macroeconomic outlook, but he was wary about the potential exchange-rate reaction. Otherwise, members remained alert to inflation risks and some of them said that the rate-cutting cycle could be paused or terminated.
  • Separately, Governor Ales Michl reaffirmed his cautious stance in an interview with Seznam Zpravy, noting that monetary policy will likely be loosened "gradually, step by step."
  • CZGBs trade on a softer footing, with 7s underperfoming as we type. The PX Index hovers around unchanged levels.
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EUR/CZK trades +0.045 at 25.365 and familiar technical levels remain in play. The initial bullish target is provided by Aug 1 high at 25.535, while bears look for losses towards the recently breached 50-DMA, which kicks in at 25.167.

  • CNB minutes revealed that Tomas Holub was the dovish dissenter who backed a 50bp rate cut last week, while the rest of Bank Board members voted for a 25bp move. Jan Frait also said that a 50bp cut would be consistent with his assessment of the medium-term macroeconomic outlook, but he was wary about the potential exchange-rate reaction. Otherwise, members remained alert to inflation risks and some of them said that the rate-cutting cycle could be paused or terminated.
  • Separately, Governor Ales Michl reaffirmed his cautious stance in an interview with Seznam Zpravy, noting that monetary policy will likely be loosened "gradually, step by step."
  • CZGBs trade on a softer footing, with 7s underperfoming as we type. The PX Index hovers around unchanged levels.