Free Trial
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CZECHIA
- While a significant amount of participants are still thinking that the CNB will keep its benchmark rate steady at 0.25% through 2021 to maintain financial conditions as loose as possible to stimulate the economy after a difficult first quarter, a rising number of sell-side firms have been pricing in one to two hikes in the second half of this year.
- Interestingly, CNB Governor Jiri Rusnok mentioned in an interview yesterday that policymakers' debate about monetary tightening will probably begin at the August meeting; the current median forecast expects CNB to rise its benchmark 2W repo rate to 0.50% by the end of the year.
- On the other hand, other central banks in the CEE region (Poland, Hungary) are expecting to keep their interest rates steady at 0.1% and 0.6%, respectively, for the rest of the year.
- Could the little divergence in monetary policy between CNB and other CEE central banks continue to support the CZK against PLN and HUF?
- The chart below shows that the momentum on CZKPLN has been positive in the past 6 months, with the 100D SMA acting as a strong support line. Key resistance on the topside stands at 0.1791 (March 30 high); a break above that level would open the door for a move up to 0.1834 (December 2011 all-time high).
Source: Bloomberg/MNI
- CZKHUF has been trending higher in the past year, ranging within its upward trending channel (chart below). The pair has received strong support in the past 10 days after testing the low of its channel on April 12 and broke above the 14 psychological resistance yesterday. Next crucial resistance on the topside stands at 14.15, which was the high reached on March 22 but also corresponds to the pair's all time high. Momentum could ease in the short term though if RSI rises above the 70 'overbought' level.
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
We are facing technical issues, please contact our team.
ok
Your request was sent sucessfully! Our team will contact you soon.
ok