EUR/CZK expected to drop to 24.80 in a year’s view – Danske Bank
|Analyst at Danske Bank Aila Mihr sees the Czech Koruna gathering traction in the next months.
Key Quotes
“CZK has weakened over the past month on the back of capital outflows due to market expectations of near-term CNB interest rate stability and the Fed continuing with its hiking cycle in the US, which has general weighed on EM risk sentiment”.
“We project EUR/CZK to continue to hover around current levels in the short term, but expect CZK to return to its moderate strengthening path soon”.
“That said, the deprecation pace is expected to abate compared to 2017, as the Czech economy shifts into a lower gear and the ECB is also gradually moving towards policy normalisation”.
“We lift our 1M forecast to 25.50 (25.40 previously) in light of recent trading ranges, but otherwise leave our EUR/CZK forecast profile unchanged at 25.40 in 3M, 25.00 in 6M 24.80 in 12M”.
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