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Koruna Outperforms CE3 Peers Amid Post-NFP Turbulence


EUR/CZK operates +0.004 at CZK23.739, with the Czech Koruna outperforming its CE3 peers PLN and HUF. The multi-year low of CZK23.716 is firmly in sight and a resumption of losses past that level would confirm the strength of underlying bearish momentum. On the other hand, the rate has been below its 50-/100-/200-DMAs for some time, while the RSI keeps flirting with oversold territory.

  • CZGB curve runs flatter at typing, with yields off earlier lows since the release of expectation-blowing U.S. NFP data. The PX index continues to show strength and last trades ~0.3% better off after lodging new cyclical highs.
  • During a presentation for market analysts, CNB's Oldrich Dedek said that the CZK's strong exchange rate is a welcome development as it helps contain inflation. The official said that "since the middle of October, we are not present on the market so the exchange rate is not supported by active intervention steps by the central bank and despite this fact the exchange rate appreciates." Worth noting that the mere existence of the CNB's backstop for depreciation risk might be lending support to the Koruna by luring foreign capital.
  • Local media outlets reported that President-elect Petr Pavel will meet with outgoing President Milos Zeman on Monday. In a BBG interview today, Pavel confirmed his intention to maintain military support for Ukraine and take an assertive stance towards relations with China.

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