Koruna Slips Despite Better-Than-Expected GDP Data

EUR/CZK sits +0.008 at 25.334, holding a familiar range so far. A break above Feb 15 high of 25.519 is needed to reignite bullish momentum, while a dip through the 50-DMA (25.186) and round figure support (25.000) would turn focus to Jan 2 high of 24.867.

• The koruna is under light pressure alongside other CE3 currencies as the greenback outperforms in the wake of relatively hawkish comments from Fed's Waller. However, it fares better than the PLN or HUF, perhaps thanks to a positive surprise in the latest GDP report.
• Czechia's final GDP readings for 4Q23 were unexpectedly revised higher. The data showed that the economy grew 0.2% Y/Y, even as consensus was looking for a confirmation of a 0.2% contraction, while the CNB had earlier pencilled in a 0.5% decline in output.
• EUR/CZK has held comfortably above the CNB's forecast for 1Q24 (24.7) for the bulk of this quarter, refusing to ease off even as the central bank flagged its concern with a weaker koruna exchange rate and its inflationary implications.
• CZGB yields are higher across the steepened curve. The PX Index refreshed cyclical highs after yesterday's upleg.