After more than two years, the Czech koruna fell below 22 crowns for dollars. The last time it was so strong was at the end of September 2018.
“The main factors strengthening the koruna against the dollar include calming the situation in the US elections and handing over power to Donald Trump Joe Biden, the existence of the Covid vaccine and real scenarios for its distribution, and improved epidemiological conditions in the Czech Republic may have a partial effect,” says Tomáš Volf , an analyst at Citfin.
All he mentions means a reduction in risk aversion, so investors are partially shifting their assets from safer ports to riskier ones, including the koruna.
“A stronger crown means cheaper imported goods and therefore also Christmas gifts ordered in dollars. On the contrary, Czech exporters are not happy about the strong koruna, which, thanks to the strong domestic currency, is less difficult to enter foreign markets and their situation is all the more complicated, ”says Volf.
The koruna also strengthens the euro, where the exchange rate has already fallen below 26.20 koruna to the euro. He was last there during August.
“We do not expect another more dramatic strengthening of the koruna. The economic situation in the Czech Republic does not correspond to a strong crown. Unemployment is likely to jump significantly at the beginning of the year, GDP will be in the red this year, people are afraid to spend and the deplorable state of public finances complicates the more permanent strengthening of the domestic koruna, “predicts Volf.
The transfer of assets from safer “ports” is evident in the prices of precious metals. “In recent weeks silver fell from $ 26.00 / ounce to today’s $ 23.40 / ounce. You can see it even more in the price gold. From the end of October, it decreased by almost 7% from 1960 USD / ounce to 1825 USD / ounce, “Volf calculates.
