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August 12, 2019 6:22 pm | FILED UNDER: business

Crown Nears Six Month Low

By Petr Dubinsky Financial Chart on computer screen

The Czech crown weakened towards a six-month low on Monday, shrugging off a surprise acceleration of price growth at home, while its regional peers traded without significant changes.

 

The crown was 0.1% down against the euro at 25.850, falling for a fourth straight session and nearing the level of 25.875 which would be its weakest since Feb. 12.

 

The Czech currency is also weaker than the average 25.40 forecast by the Czech National Bank for the current quarter.

 

However, analysts do not expect the central bank to react by tightening monetary policy, as they forecast inflation to slow down and also because of easing by the European Central Bank and the Federal Reserve in the United States.

 

“We do not expect the CNB to hike rates. The risks to future inflation development are tilted rather towards a steep decline, in connection with a more significant weakening of foreign demand due to the rising threat of a disorderly Brexit and an escalation of trade wars,” said Patrik Rozumbersky, economist at UniCredit.

 

Elsewhere, Poland’s zloty and Hungary’s forint were trading flat.

 

Equity indexes in Prague and Budapest were up by around 0.5%, as European shares bounced back after a tumultuous week dominated by U.S.-China trade tensions and Italy’s political turmoil. Going in the opposite direction, the Warsaw stock exchange’s main index was down 0.3%.

 

Via Reuters

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