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EUR/CZK likely to decline gradually to 25 by H1 2018 - Commerzbank

The EUR/CZK pair is expected to decline gradually. According to a Commerzbank research report, the currency pair is likely to decline to 25 by the first half of next near. This is expected to be due to the Czech National Bank’s more hawkish monetary policy stance as compared with other CEE nations. If the central bank were to launch into a more aggressive hiking cycle than expected, the EUR/CZK pair would definitely decline by more than currently projected.

“As base-case, we maintain a modest appreciation profile for CZK for the coming quarters: there is still large long CZK positioning in the market, which was built up in anticipation of the FX cap removal – the latest data on foreign ownership of local government bonds suggests that these long positions have not unwound”, stated Commerzbank.

The size of such positioning is seen in huge rise in FX reserves resulting in the removal of the cap. Every considerable appreciation by the Czech koruna will therefore give an incentive for such positions to take profit, which signifies that in quarters ahead there would be self-neutralising forces preventing too rapid a CZK appreciation, added Commerzbank.

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November 24 15:30 UTC Released

USECRI Weekly Index*

Actual

145.6 %

Forecast

Previous

145.6 %

November 24 14:45 UTC Released

US1st Half-Mth Infl YY*

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54.6 %

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54.6 %

November 27 09:00 UTC 31913191m

ITExport Prices*

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111 %

November 27 09:00 UTC 31913191m

ITImport Prices*

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116.1 %

November 27 14:00 UTC 34913491m

MXTrade Balance, $*

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-1.886 Bln USD

November 27 14:00 UTC 34913491m

MXTrade Balance SA*

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Forecast

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-1.559 Bln USD

November 27 15:30 UTC 35813581m

USDallas Fed mfg bus index

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Forecast

Previous

27.6

November 27 21:00 UTC 39113911m

KRBOK Manufacturing BSI*

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Forecast

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87 Bln BRL

November 28 00:00 UTC 40914091m

BRCentral Govt Balance

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Forecast

Previous

-22.725 Bln BRL

November 28 07:00 UTC 45114511m

DEGDP Growth QQ* Advance

Actual

Forecast

Previous

10.7 %

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