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EURPLN, EURCZK Rise Half a Percent Amid Holiday Thinned Trade

CEE FX
  • EURPLN is seen ticking higher towards initial firm resistance at 4.6232, the 20-day EMA, as thin liquidity due to the holidays exacerbates currency moves. The weakness in PLN is coinciding with EURUSD slipping back below 1.10 and EURPLN potentially triggering a few stops above the overnight highs and the highs set late last week around 4.60. Furthermore, comments from central banker Gabriela Maslowska, who expects inflation to reach single-digits by Autumn, have crossed wires this morning following last week’s softer preliminary inflation data.
  • Similarly, EURCZK rises above the April highs at 23.5790. This seen as a moderate retracement of the strong downtrend amid ongoing hawkishness from the central bank regarding both policy and the level of the Koruna. The moves precede the CNB rate decision on Wednesday. The CZK FRA curve dovishly repriced last week following Hungary’s signal that it is beginning its easing cycle, though rates are expected to be held at 7%.

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