With the Fed meeting coming up next week, a preference for the US currency was evident in the Eurodollar market. Of course, this was helped by the strengthening of the euro in the previous week, so many are talking about a partial correction of the euro’s gains so far. The greenbacks were particularly helped by other strong numbers from the labor market, in the form of a low number of new applicants for unemployment benefits last week. The retail sales control group was also strong, indicating a solid contribution of household consumption to GDP, although the overall retail sales number disappointed. The market is thus fanning the possibility that the upcoming FED meeting may not be the last one at which rates will be increased.
The Czech crown did not come out at all this week. While the Polish zloty ended this week essentially unchanged, the Czech crown lost 1.2%. It should be noted that the worst currency region was the Hungarian forint with a loss of 1.7%. The trend of the weakening of the koruna was started on Tuesday by the Vice-Governor of the Czech National Bank, E. Zamrazilová, with a statement that she expects the koruna to weaken in the rest of the year, by up to one koruna in a year. She also stated that, in her opinion, monetary conditions are sufficiently tight. According to her, the question then is when to start loosening monetary conditions, which also did not affect the koruna interest rate differential. While at the beginning of the week the koruna exchange rate was around 23.75 CZK/EUR, during the Friday session the exchange rate climbed up to 24.08 CZK/EUR. The koruna thus attacked this year’s weakest value.
Author: Jan Vejmělek
2023-07-21 13:22:34
#Koruna #weakest #beginning #year #Commentary
