Czech Koruna: Hawkish CNB keeps CZK supported against Euro - Societe Generale
Societe Generale’s Kenneth Broux flags that a surprise upside in Czech inflation to 2.5% has reinforced the Czech National Bank’s hawkish stance. With policymakers signalling a possible hold or hike, attention turns to core and services inflation data that could justify a November rate increase.
Czech National Bank (CNB) maintained a firm stance on the Czech Koruna (CZK) as inflation data revealed a surprise 2.5% increase in September, up from 1.9% in August. This surprising inflation growth has reinforced the hawkish tone of the CNB, which has signaled a potential hold or rate hike. The bank now focuses on October 13th's core and services inflation data, which could potentially justify a November rate increase.
Higher probability of additional tightening is seen favorably impacting the CZK, potentially moving the EUR/CZK rate below 24.50.
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