Koruna Trades Flat Versus Euro Despite CNB's Preference For Firmer Exchange Rate

EUR/CZK trades flat at CZK24.36, with USD/CZK also virtually unchanged at CZK23.63 as the Koruna lags its V4 peers PLN and HUF. Comments from central bank chief stole the limelight this morning.

• CNB Gov Michl argued against further monetary tightening, noting that interest rates are already in contractionary territory. He signalled preference for a stronger Koruna, which would help contain double-digit inflation.
• The PX index extends its pullback from Nov 14 cyclical high, it remains to be seen if the current spell of weakness will prove temporary and transition into a bull flag formation. For now, the index trades 0.1% lower on the session, despite firmer showing from regional peers.
• Should EUR/CZK manage to break above Nov 17/18 highs of CZK 24.41, bulls could set their sights on channel top/50-DMA at CZK24.48/24.49. Conversely, a fall below channel floor at CZK24.32 would encourage bears to target Nov 8 low of CZK24.24.
• Czechia's business & consumer sentiment gauges will be published tomorrow morning.