Koruna Catches Bid Ahead Of CNB Week

EUR/CZK has sold off aggressively after peaking at 24.143. Local headline flow has been limited, but profit-taking/pre-CNB positioning may have played a role in the move. The koruna is now the second-best performer in EMEA space after the South African rand.

• Spot EUR/CZK last changes hands -0.065 at 23.978 after lodging its worst levels in a week. Bears look for a continued move lower towards the 23.745 support area, which cushioned losses in mid-July.
• To the best of our knowledge, there have been no fresh CNB comments after the blackout period began yesterday. The central bank published the full readout of Governor Michl's statement to the Senate, in which he sought to reaffirm the CNB's hawkish credentials.
• Next week, President Petr Pavel is expected to nominate the successor of Constitutional Court chief Pavel Rychetsky, who retires on August 7. The top court may get some attention as opposition parties threatened to file complaints about parts of the government's fiscal consolidation package and the process leading to its adoption.