EUR/CZK vainly gathering strength for another stage of attack to 24.60-70 – ING
July inflation will be published today in the Czech Republic. The EUR/CZK pair trades around the 24.50 level and economists at ING expect the market to simmer an attack to the 24.60-70 zone.
Tricky inflation print to test CNB pain threshold
“We expect inflation to jump from 17.2% to 18.5% today, while the market is expecting 17.9%. The central bank expects 18.8% in its new forecast, but even a higher number cannot be ruled out at this point. For the Czech National Bank, however, we believe the pain threshold is high given that any surprise will come from energy prices, which the new board places on the cost side, thus out of the central bank's reach.”
“Yesterday's 20 bps jump in the short end of the curve, presumably in preparation for today's inflation, and profit-taking should limit that market reaction.”
“On the FX front, the market remains safely away from the 24.60-24.70 level after last week's CNB meeting and for now is vainly gathering strength for another stage of attack against the central bank, which has been defending the koruna.”
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FXStreet Insights Team
FXStreet
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