13 Jan 2015
Czech koruna at new six year lows – KBC
FXStreet (Barcelona) - The KBC Bank Research Team, shares that the Czech koruna was weighed down by lower than anticipated retail sales data yesterday, and further anticipate the currency to remain under pressure till the CNB meeting in February.
Key Quotes
“Lower than expected retail sales yesterday weighed on the koruna, which weakened to fresh 6-year low at the beginning of the week. Later the market calmed down a bit as central banker Jiri Rusnok said in the interview that central bank has no reason to change the intervention level the CNB had set for the koruna’s exchange rate. Although reaching the inflation target seems according to Rusnok more distant, he said that the inflation is still on the trajectory of gradual return to the inflation target”
“Nevertheless it is worth saying that, although the comments of Mr. Rusnok were published on Monday, the interview had been taken before the publication of Friday’s inflation figures – these surprised on the downside falling close close to zero.”
“We believe that the Czech koruna can remain under pressure till the February meeting of the CNB.”
“Regarding the rest of the region, low inflation and bets on of further monetary easing weighed on the Hungarian forint as well as on the Polish zloty. Polish inflation, scheduled for Thursday, should hardly change this trend. Although we do not expect NBP to change its base rate already on Wednesday, CEE currencies are likely to remain under the pressure in short term.”
Key Quotes
“Lower than expected retail sales yesterday weighed on the koruna, which weakened to fresh 6-year low at the beginning of the week. Later the market calmed down a bit as central banker Jiri Rusnok said in the interview that central bank has no reason to change the intervention level the CNB had set for the koruna’s exchange rate. Although reaching the inflation target seems according to Rusnok more distant, he said that the inflation is still on the trajectory of gradual return to the inflation target”
“Nevertheless it is worth saying that, although the comments of Mr. Rusnok were published on Monday, the interview had been taken before the publication of Friday’s inflation figures – these surprised on the downside falling close close to zero.”
“We believe that the Czech koruna can remain under pressure till the February meeting of the CNB.”
“Regarding the rest of the region, low inflation and bets on of further monetary easing weighed on the Hungarian forint as well as on the Polish zloty. Polish inflation, scheduled for Thursday, should hardly change this trend. Although we do not expect NBP to change its base rate already on Wednesday, CEE currencies are likely to remain under the pressure in short term.”