In the last month or so, the koruna has lost about 30% to the euro percent.
Compared to the market’s expectations about the exchange rate we started going last autumn, the decision is relative very surprised. At that time, there was a feeling that there were reasons they are not for a strong crown and they just won’t be.
What’s behind the fitness crown? Into the heads of business women Of course, none of us can see the foreign exchange market. D se It is impossible to estimate that the crown will move to stronger values observed in the last weeks is the most sleep sms of pedestrian traffic (due to low liquidity after New Year) and a fundamental shift to strength values
The main fundamental factor is most likely improved regional economic prospects due to abundance gas and falling energy prices.
In addition, there is a slight shift in NB’s rhetoric towards the possibility of external rates in the event of strong pro-inflationary pressure due to high government spending or high wage growth. This weight in the heads of foreign exchange marketers could have increased in the beginning of January, when the data about significant interannual wage increases in industry and in construction for the month of November came out. Do not pay attention to the comments of some of the banking councils indicating the minimum possibility of keeping rates at the current level and according to, not for the time being, the forecast of the NB itself.
On the other hand, the comparative example of one-year market interest rates (IRS) on the euro and the koruna only indicates that the previous multi-month decline in the expected income of borrowing the koruna has ended, not that it has turned into growth.
Another fundamental factor should be the trend of Czech companies in the past months to earn a dominant currency in euros, and the consequent increase in the demand of companies for crowns.
Even with this factor, there is a question mark: the migration of companies to the euro will most likely gradually stop as the difference between the koruna and the euro changes over the years and the range of companies that pass the exchange rate risk test in the banks will change.
Therefore, we should not be completely surprised if the exchange rate corrects above 24 crowns per euro in the next few weeks or months.
Michal Skoepa, esk spoitelna analyst
esk spoitelna is the bank with the longest tradition on the esk market. It has been one of the cornerstones of the Czech banking system for 200 years. Currently, 4.7 million clients provide services for piblin. Since 2000, it has been part of the international financial group Erste Group Bank.
More information at: www.csas.cz