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‘Easing’ Geopolitical Tensions and CNB ‘Hawkishness’ Could Support CZK

CZECHIA
  • We saw recently that CNB members have started to sound more 'hawkish' following the large print in inflation on Monday (CPI inflation accelerated to 9.9% in January, vs. 9.3% exp.).
  • Governor Rusnok commented this week that even though inflation number was not a major surprise, he cannot rule out Czech rates rising further.
  • Rusnok added that that 5% is not a ceiling for Czech policy rate and he cannot say if Czech rates need to rise above that level.
  • This morning. President Zeman said in an interview that he believes that Russia will not invade Ukraine.
  • Easing geopolitical tensions combined with some CNB ‘hawkishness’ could support CZK against major crosses in the ST.

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