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Koruna Falters, Shows Sensitivity To Fallout From US

CZK

EM FX space remains sensitive to US data releases, with a above-forecast ISM data pushing EUR/CZK to new session highs as the greenback regained poise. The rate last deals +0.084 at 24.150, ahead of the much awaited Q2 wage data next week, which could influence CNB monetary policy decisions going forward (recall Deputy Governor Zamrazilova's comments from a few months ago).

  • In Czechia, President Petr Pavel signed the government's pension reforms, but missed the deadline for the legislation to take effect this month. Elsewhere, Czechia's YtD budget deficit narrowed to CZK194.6bn, with a CZK54bn dividend from majority-state owned utility CEZ contributing to the August outcome. Finance Minister Zbynek Stanjura said that the government is doing all it can to keep the CZK295bn deficit target for the full year.

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