KBC Market Research Desk
KBC Bank
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Koruna hit a three-week low against the euro
Stronger US GDP could undermine regional assets
After a couple of days of trading in the vicinity of the central bank’s intervention floor, the Czech koruna weakened by about 0.2% yesterday. Although the volume traded was clearly above the average (the highest since February, according to a Reuters data), we do not think the CNB was behind the move. It is however true that the volume of liquidity in CNB open market operation facilities has increased recently which also had impact on Czech short-term interest rates (increase in the volume could however happen due to many reasons). Today in early trading, the koruna edges back below EUR/CZK 27.10.
Regarding the impact of the FOMC meeting, since it brought no major surprises, the reaction has not been apparent in the market. Later today, the market will again focus on the US, namely on the release of US GDP figures for the second quarter. We believe that the risks are for a stronger outcome which could in turn have (negative) consequences for the regional assets…
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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