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Koruna Underperforms CE3 Peers

CZK

EUR/CZK popped higher as trading resumed after the weekend but quickly gave away its initial gains. However, the koruna continues to struggle to catch up with its CE3 peers. The rate last deals +0.006 at 24.432, with bulls looking for renewed gains towards Sep 12, 2023/Sep 29, 2022 highs of 24.659/24.700. Conversely, the 24.3 area provides the initial area of support.

  • Regional politics take focus at the start to the week as former PM Robert Fico's SMER party became the frontrunner to form the next Slovakian government. Czech President Petr Pavel recently warned that relations with Slovakia could deteriorate if Fico returns to power.
  • Czechia's S&P Manufacturing PMI fell to 41.7 in September from 42.9 in August, missing the BBG median estimate of 42.5. The survey "signalled further troubles for the Czech manufacturing sector" as "another sharp monthly contraction in new orders dragged output down again, with foreign client demand also dissipating amid challenging economic conditions in key export markets".
  • Czechia's September budget balance will be published later today.

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