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CZK Strength Needs To Be Based on LT Inflows (Michl)

CZECHIA
  • Strength of the Czech koruna needs to be based on long-term inflows of money into the country, incoming central bank Governor Ales Michl wrote in his weekly opinion column in Mlada Fronta Dnes newspaper (BBG).
  • Czech government is planning to accelerate the reduction of post-Covid budget deficits, but the process will not be as quick as initially planned following the breakout of the Ukraine war.
  • EURCZK continues to trade within its tight range between 24.67 and 24.77; key resistance to watch on the topside stands at 24.9150 (200DMA). On the downside, support to watch below 24.67 stands at 24.50.
  • Czech 10Y yield consolidated sharply lower last week, finding support slightly above the 50DMA at 4.77% on Friday. Next support to watch below that stands at 4.50%. On the topside, first resistance to watch stands at 5%, followed by 5.5%.

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