Daily outlook for CZK: Commerzbank

Quotes from Commerzbank Corporates & Markets:

-CZK: Heated debate on CNB's exchange rate policy continued yesterday and EUR-CZK remained volatile as the market digested President Zeman's promise to appoint board members who will oppose CZK devaluation. We hold that: 1) CB independence will remain intact in the Czech Republic;

-2)Given that CNB has just extended the timeframe for FX targeting because of more deflationary circumstances, not less, we anticipate Governor Singer reiterating commitment to the FX floor. What happens to CNB policy after Singer retires in June 2016 is a distant concern - in the meantime, we see EUR-CZK drifting back higher.