EUR/CZK expected to remain rangebound near term – Danske Bank

The Czech Koruna is seen extending the sideline theme vs. its European peer for the time being, suggested Analysts at Danske Bank.

Key Quotes

“Despite the June CNB hike, EUR/CZK continues to trade around 25.90 and we project the cross to continue to hover around current levels in the short term”.

“In the medium term, we expect the CZK to return to its moderate strengthening path, as the Czech macroeconomic backdrop remains very favourable and the CNB is likely to deliver its next interest rate hike within the coming months”.

“This said, we expect the depreciation pace to abate compared with 2017, as the Czech economy shifts into a lower gear and the ECB is also gradually moving towards policy normalisation. We leave our forecasts for EUR/CZK unchanged at 25.70 in 1M, 25.50 in 3M, 25.00 in 6M and 24.80 in 12M”.