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Koruna Resumes Rally Printing New 15-Year Highs

CZK

EUR/CZK refreshed its 15-year lows today as the broader risk-on tone supports EM FX space, while the Czech Koruna is the best performer in the EMEA space. The rate remains in a clear downtrend, with the Koruna benefitting from the central bank's backstop against its depreciation and widening interest-rate differentials.

  • When this is being typed, the pair trades -0.066 at CZK23.699. It has taken out key support from Jan 30, 2023/Oct 30, 2008 lows of CZK23.700. Further losses past Aug 12, 2008 low of CZK23.682 and Aug 1, 2008 low of CZK23.445 would lend support to the bearish case.
  • CZGB yields have stabilised near session lows, albeit local government bonds have underperformed CE3 peers. The PX index continues to push higher and last is ~1% better off after lodging new cyclical highs today.
  • Czechia's January CPI report will cross the wires tomorrow.

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