CZK seen picking up pace in the next months – Danske Bank

Assistant Analyst at Danske Bank Nicolai Ringkobing sees the Czech Koruna appreciating further in the next months.

Key Quotes

“Over the past month, the CZK has appreciated gradually on expectations of further tightening by the CNB. The CNB delivered a 25bp hike at its November meeting but, with this being anticipated by the market, we believe it is more important to watch out for the CNB’s next step”.

“We project the cross will hover around current levels in the short term and look for more gradual CZK strengthening over the medium term based on robust Czech economic fundamentals and relative monetary policy divergence, as the CNB seems ready to continue its hiking cycle, while we do not expect an ECB hike before 2019”.

“We lower our forecasts to 25.60 in 1M (previously 25.90), 25.50 in 3M (was 25.80) and 25.30 in 6M (prev. 25.70) and 12M (was 25.50)”.