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Koruna Tad Firmer, CNB's Prochazka Says Inflation Risks Are Dissipating

CZK

EUR/CZK struggles to make a sustained break above the 61.8% retracement of the Oct 26 - Nov 29 sell-off at 24.539 after ripping through the 50.0% Fibo retracement of that range yesterday. The pair last deals -0.026 at 24.482, with bulls looking for a move through 24.539 and the nearby Nov 20 high of 24.554 before taking aim at Oct 26, 2023/Jul 7, 2022 highs of 24.747/24.797. The initial layer of support has been defined at 24.203, the low print of Nov 29.

  • CNB's Jan Prochazka told Reuters yesterday that a number of inflation risks that have prevented the Bank Board from cutting rates are gradually disappearing. He refused to commit to any specific vote at next week's meeting, while noting that delaying the start of the easing cycle until February could create a false impression that the CNB is not confident that inflation will ease to around +3.0% Y/Y in January.
  • The local data docket is empty today. Globally, the focus is on the Fed's rate decision, with policymakers expected to stand pat.

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