KBC Market Research Desk
KBC Bank
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German IFO helps CE currencies
EUR/CZK continues to knock on the intervention floor
The Central European currencies opened this week with strengthening. Markets largely ignored the slump in Chinese and Asian markets while taking comfort from improving German business sentiment indicator, IFO. Given that the indicator has established oneself as a core component of most Central European leading indicators, its strong reading has been a piece of good news not just for Germany but for all regional economies. As for Hungary, its local consumer sentiment has slightly improved too.
The Polish zloty and the Hungarian forint both edged up by 1 % during the session. The Czech koruna, in contrast, stayed more or less stable, sticking to the 27.00 EUR/CZK floor guarded by the CNB.
Looking ahead, the approaching Fed meeting might attract attention in the upcoming days as local calendars of economic events remain thin for the rest of this week. The Czech koruna should continue to be much less volatile than other regional currencies, which implies that the EUR/CZK pair may continue to knock on the intervention floor.
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.
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