Today’s calendar includes a monetary policy meeting of the Czech National Bank (CNB). Economists at ING expect EUR/CZK to move below 23.50.

CNB to confirm its readiness to intervene in the FX market should the CZK move higher

“We expect the CNB to follow other European central banks with a hawkish tone today, which may favour a repricing of rate cut expectations and a higher CZK.”

“Together with the Hungarian Forint, the Koruna has the highest beta against the global story and higher EUR/USD and low energy prices are playing into its hands. Moreover, we expect the CNB to confirm its readiness to intervene in the FX market should the CZK move higher. Thanks to that, the potential loss is limited and moreover, we believe the market is not ready for CNB intervention levels at the moment, which we estimate at around 24.60-24.70 EUR/CZK. Moreover, the Koruna maintains decent carry within the CEE region.” 

“We believe the Koruna has the best risk/reward within the region at the moment and we expect a move below 23.50 EUR/CZK today.”