Investiční bankovnictví (Komerční banka)
Currencies  |  February 15, 2013 15:52:00

Designated weakening of the crown, there is still

Crown in line with other regional currencies weakened during the past week. Compared to the end of last Friday's euro solidified by about 0.6%, not only against the Czech currency, but also to the Hungarian. For households and businesses Polish zloty paying one euro more expensive then even a full percentage point. Driven more by the prevailing pessimism in the markets was a disappointment from macroeconomic indicators showing the weakness of the regional economies. Worse data, however, came from the major European markets, and after the January optimism came in February in a sobering markets. Rate CZK / EUR and in the end of the week was slightly below the 25.40.

In the Czech Republic, we did not receive any favorable reports. The first estimate of GDP for the fourth quarter showed a decline of 0.2% q / q, respectively, 1.7% y / y. Throughout last year, the Czech economy down by 1.1%.Neither the entry into this year would not be too positive when the economy should continue to remain in recession. The economy is not apparent demand inflationary pressures, which was confirmed by data on the January consumer price inflation. Inflation reached a level of 1.3% m / m, or 1.9% y / y, and decreased as compared to December's level slowed to 2.2%. From the perspective of the CNB inflation rate fell by 0.1 percentage points, which again sounds in comparison with its anti-inflationary prognosis.

Overall, we believe that the economy could help further boost in the form of at least weaker crown. The current exchange rate, we seem still too strong, if the Crown act as an additional monetary policy tool, especially if the economy strengthens deflationary pressures.Return of the Czech currency to levels before last meeting CNB does not seem to be definitely unrealistic, and we would not even be surprised shift CZK / EUR rate to the border 26.00. From the published minutes of the last meeting CNB revealed that the need for further easing of monetary conditions appears to be weaker in the continuing weakness of the crown (at the time of 25.60). Just focus on the phrase "continuing weakness in the Crown 'missed the comments Governor M. Singer at the press conference. This implies that if the crown remained longer at stronger levels than the stipulations of the CNB forecast, it would be the next release, a weaker koruna needed.

In the next week will be published index of industrial producers, which should be in January increased by 0.7% m / m, or 0.9% y / y. The main reason should be the prices of electricity, gas, heat and water.If the data the same as last month surprised weaker growth dynamics, it would be just grist to the mill tailing Czech crown. From home but no factor (except for a very surprising result PPI), which could wiggle more radical way with the domestic currency expected. Crown should thus respond primarily to events in global and regional markets.

Author: Miroslav Frayer

Tyto zprávy pro vás vytváří Investiční bankovnictví KB.
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