Published at 10:52 (GMT) 10 Dec

EURUSD

The key data releases this morning have actually bettered markets expectations after CPI decelerated strongly to 2.7% y/y, getting closer to the 2.0% CNB target, while industrial production rebounded to 4.1% y/y from -6.8% previously. The decent figures consequently eases the pressure on the MPC's need for FX intervention, but in fact the softer inflation figures suggests that should FX use be needed, the impact on consumer prices could be limited and thus EUR/CZK is very little moved beyond its 25.15-25.25 range this morning. Although we mentioned in our weekly strategy that S&P futures have a been a better proxy for the koruna over the past number of sessions, EUR/USD is also helping CZK stability in that the cross is better bid. 25.30 marks first resistance, while the pivotal 25.13 which also represents the 50% Fibonacci retracement from the Jul-Sep fall at 25.13 remains intact. AA

EURCZK