KBC Market Research Desk
KBC Bank
Headlines
Czech koruna almost tested CNB’s readiness to intervene
Czech hard macro figures remain solid and CNB Bank
Board likes them as latest Minutes showed
The Czech koruna almost tested CNB’s intervention floor set by the Czech National Bank at the end of the last week. The EUR/CZK pair slipped below EUR/CZK 27.10 level on Friday afternoon so the Central Bank’s intervention looked imminent. The market could have been speculated that given the Greek referendum on Sunday and the Czech national holiday scheduled for Monday, it would be wise to test CNB’s readiness to intervene against the strength of the Czech currency. Nevertheless as showed today’s market data (on Reuters) the intervention was not necessary as the Czech koruna weakened a bit naturally. Moreover, the CNB also confirmed that the markets did not trigger its (promised) reaction. Nevertheless, given the small gap between the spot rate and the intervention floor one cannot rule that such an intervention will come later on during the summer.
The main reason is very solid Czech macro data. On Friday, there were a very strong outcome of the Czech foreign trade in May and even today’s releases of the May retails sales and industrial output were solid too. No wonder that some CNB Bank Board members stated that the renewed economic growth would probably lead to renewed real convergence of the Czech economy (to the EMU core) as Friday’s release of the latest Minutes showed.
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
Recommended Content
Editors’ Picks
AUD/USD risks a deeper drop in the short term
AUD/USD rapidly left behind Wednesday’s decent advance and resumed its downward trend on the back of the intense buying pressure in the greenback, while mixed results from the domestic labour market report failed to lend support to AUD.
EUR/USD leaves the door open to a decline to 1.0600
A decent comeback in the Greenback lured sellers back into the market, motivating EUR/USD to give away the earlier advance to weekly tops around 1.0690 and shift its attention to a potential revisit of the 1.0600 neighbourhood instead.
Gold is closely monitoring geopolitics
Gold trades in positive territory above $2,380 on Thursday. Although the benchmark 10-year US Treasury bond yield holds steady following upbeat US data, XAU/USD continues to stretch higher on growing fears over a deepening conflict in the Middle East.
Bitcoin price shows strength as IMF attests to spread and intensity of BTC transactions ahead of halving
Bitcoin (BTC) price is borderline strong and weak with the brunt of the weakness being felt by altcoins. Regarding strength, it continues to close above the $60,000 threshold for seven weeks in a row.
Is the Biden administration trying to destroy the Dollar?
Confidence in Western financial markets has already been shaken enough by the 20% devaluation of the dollar over the last few years. But now the European Commission wants to hand Ukraine $300 billion seized from Russia.