In two weeks, the Czech Republic became the worst affected country in the EU, leaving Spain and France behind, Bloomberg summarizes. “The koruna’s exchange rate is now firmly gripped by the second wave of the pandemic in the Czech Republic,” said analyst Melanie Fischingerová of Commerzbank. “The crown has recently come under pressure due to fears of a new surface quarantine,” she added.
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The Czech currency is approaching its seventh weekly loss. At the same time, the Polish zloty and the Hungarian forint are rising for the second week, although the number of newly infected people is rising in these countries as well, Bloomberg reminded.
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Uncertainty about the second wave of the pandemic and the impact of related restrictions on the economy may persist in the coming weeks. I think that the recent decline in the currencies of Central and Eastern Europe was an exaggerated reaction, “Radomír Jáč, chief economist of Generali Investments CEE, told Reuters.
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“The macroeconomic background continues to support the prospect that the Czech koruna will recover from its recent losses as concerns about the impact of the pandemic subside.”
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The koruna has strengthened against both major world currencies since Thursday evening. It strengthened against the euro by 15 pennies and today around 17:00 it was trading at the rate of 27.04 CZK / EUR. The Czech currency improved by 27 pennies against the dollar to 22.88 CZK / USD. This follows from the data on the Patria Online server.
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