EUR/CZK seen at 25.00 in a year’s view – Danske Bank

Analyst at Danske Bank Aila Mihr gave her views on the Czech Koruna in the next months.

Key Quotes

“We project that EUR/CZK will trade around current levels in the short term, as the CNB enters wait-and-see mode”.

“We expect CZK to continue with its gradual appreciation path over the medium term based on robust Czech economic fundamentals and relative monetary policy divergence. But with the CNB on hold, and the ECB moving towards normalisation by year end, there will be less support from the latter factor going forward, which is also why we expect a more gradual EUR/CZK depreciation pace compared to the CNB forecasts”.

“But given the possibility of another CNB hike in H2 18, we stress that the risk to our long-term forecasts lie to the downside. In light of the move lower following the February CNB meeting, we adjust our forecasts to 25.40 in 1M (previously 25.50) 25.40 in 3M (25.50), 25.10 in 6M (25.30) and 25.00 in 12M (25.30)”.