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Koruna Sell-Off Halts After CNB Comments, Participants Look For More

CZK

EUR/CZK paused its rally amid a flurry of comments from CNB members, who pushed back against overdone rate-cut wagers. It is unclear if it was a coordinated verbal intervention, but three policymakers spoke after the pair broke firmly above the 24.00 figure. Its corrective pullback yesterday allowed the pair to unwind overbought technical conditions, with the RSI returning below 70.

  • EUR/CZK last deals -0.006 at 24.070, looking for fresh catalysts. On the topside, the focus is on Dec 30, 2022 high/23.6% retracement of the 2020-2022 sell-off at 24.336/24.341. Meanwhile, bears look for a move towards 23.745, which limited losses earlier this month.
  • CZGB curve has steepened today, with yields sitting -3.6bp to +6.8bp. The Finance Ministry is offering CZK13bn of bonds maturing in 2029, 2031 and 2034 at an auction today.
  • Participants are on the lookout for more comments from the CNB ahead of the beginning of the media blackout tomorrow.

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