Koruna Keeps Losing Altitude, Unimpressed By CNB Comments

The Czech Koruna has been depreciating for the past six days and extends losses today, despite a barrage of hawkish comments deployed by CNB officials in the recent days. Still, EUR/CZK failed to close above its 100-DMA yesterday and has struggled to stage a sustained break above that moving average this morning.

• Earlier this week, CNB Governor Ales Michl called koruna strength the "alpha and omega" of his philosophy and emphasised that the central bank will not compromise on its strict approach until inflation returns to the vicinity of the target.
• The koruna has been the only CE3 currency to underperform the euro this month, dropping to new cyclical lows versus regional peers. In the case of PLN/CZK, the latest upleg came after the formation of a double bottom pattern.
• EUR/CZK trades +0.009 at CZK23.668 at typing. The rate pierced its 100-DMA/May 1 high (CZK23.684/23.705), which draws attention to Mar 28 high of CZK23.820. Bearish focus is on CZK23.340, the low print of May 9.
• Locally, the government continues to push back against the expected backlash against its fiscal consolidation package, with Prime Minister Petr Fiala vowing not to bow under pressure from business lobbies and trade unions.