Koruna Appreciates To New Cyclical Highs, CNB Speak Under Microscope

EUR/CZK refreshed its multi-year lows today, bottoming out at CZK23.600, as CNB Governor Michl reiterated his support for a strong exchange rate. When this is being typed, EUR/CZK operates -0.013 at CZK23.633, with bears keeping an eye on Aug 1, 2008 low of CZK23.445. Bulls look for recovery past the 50-DMA at CZK23.907.

• Separately, CNB's Tomas Holub suggested that he might repeat his vote for a 50bp rate hike at the Bank Board meeting on March 29, depending on the incoming inflation and wage growth data. Holub's call for higher interest rates is a dissenting opinion in the Bank Board, where most members prefer rate stabilisation.
• President-elect Pavel expressed his doubts about the government's plan to slow the indexation of pensions, which will be presented in parliament tomorrow. Pavel said he will outline his position in more detail after taking office on March 9.
• CZG yields are generally lower across the curve, while the PX index has inched higher.