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Koruna Tad Firmer After Volatile Start


EUR/CZK last trades -0.035 at CZK23.938 after some above-normal volatility seen earlier in the day. Bears would like to see the pair ease off through its 50-DMA (CZK23.768) and towards Mar 1 low of CZK23.343. Meanwhile, a sustained break above Jan 23 high of CZK24.116 would expose the 200-DMA/Dec 30 high at CZK24.307/24.336.

  • CZGBs are 2.5-6.1bp cheaper across the curve, losing ground alongside POLGBs. The PX index has added ~0.6%, gaining for the second consecutive day, but is yet to test yesterday's highs.
  • ING recommended shorting EUR/CZK on the view that the Czech Koruna will "benefit most from a reduction in risk aversion among CEE peers, and from lower energy prices," which is likely lending some support to the CZK today.

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