Koruna Slightly Firmer, Recessionary GDP Data Beats Expectations

EUR/CZK has struggled for a clear direction in morning trade, showing little reaction to the release of Czech advance GDP data for 4Q2022. The rate last deals -0.013 at CZK23.828, with bears looking for a dip through yesterday's/Oct 30, 2008 lows of CZK23.716/23.700. On the flip side, a break above the 50-DMA (CZK24.135) would bring bulls some reprieve.

• Czechia may have experienced a mild technical recession towards the end of last year amid elevated energy prices and interest rates. The quarterly contraction was driven by weaker household consumption. That said, the data was better than expected by analysts.
• As expected, China condemned Czechia's incoming President Petr Pavel for holding a phone call with Taiwan President Tsai Ing-wen just two days after his election. A spokesperson for Beijing's Foreign Ministry called it a "blatant violation of the Czech Republic's political commitment to the one-China principle."