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Koruna Keeps Losing Ground, Ignores CNB Minutes

CZK

EUR/CZK topped out at CZK23.630, its best level since Mar 1. Hawkish CNB minutes failed to offset the impression left by below-forecast inflation data earlier this week. The pair last deals +0.073 at CZK23.618 and bulls see the 100-DMA/May 1 high of CZK23.701/23.705 as their initial target. Bears keep an eye on May 9 low of CZK23.340.

  • Karina Kubelkova and Tomas Holub initially voted for a 50bp rate rise at the most recent Bank Board meeting and later moderated their call to a 25bp hike as a compromise, this time joined by Jan Prochazka. The Bank Board showed concern about tight labour market and expansionary fiscal policy, something that Governor Michl communicated during his press conference.
  • Note that the CNB changed the text of the minutes on their website. The initial version erroneously stated that the motion to deliver a 50bp rate hike was backed by Kubelkova and Prochazka.
  • Czechia's current account surplus shrank to +CZK11.27bn in March from +CZK13.31bn prior, topping the +CZK10.10bn consensus call.

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