The koruna is the strongest against the euro since the summer of 2008, breaking the 23.70 CZK/EUR barrier

The koruna is the strongest against the euro since the summer of 2008, breaking the 23.70 CZK/EUR barrier

The koruna is the strongest against the euro since 2008, breaking the 23.70 mark CZK/EUR

Money, euro, Czech crown, banknotes, coins – illustration photo.

Prague – The Czech currency is the strongest against the euro in the last 14 and a half years. Today, it closed trading at a rate of 23.69 CZK/EUR, which is the best result since the end of July 2008. Against the dollar, the koruna was trading at 22.01 CZK/USD today around 17:00. Compared to early Wednesday evening, the koruna strengthened against the single European currency by seven halers. Against the dollar, it improved by 15 pennies. This follows from data from the Patria Online server.

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The koruna did well today without much support in the macroeconomic calendar, said economist Kevin Tran Nguyen from Komerční banka. “At the end of the European session, it was around 0.3 percent stronger, making it the strongest since July 2008,” he added.

The koruna has been steadily strengthening against the euro since around mid-November. Already at the end of last year, the euro reached its strongest exchange rate in the last 11 years. But the crown is still over 70 pennies short of breaking the absolute record. At the beginning of the third decade of July 2008, it strengthened to 22.97 CZK/EUR.

A strong koruna is good news at the moment, as it helps dampen inflation by making imported goods cheaper, including energy raw materials. Traditionally, the effect of a stronger koruna is also positive for Czech tourists, for whom it makes stays abroad cheaper. On the contrary, a strong koruna can be a problem for domestic exporters, which reduces their competitiveness.

Today, the Prague Stock Exchange closed at the highest value in almost a year

Today, the Prague Stock Exchange closed at the highest value in almost a year. The PX index rose by 1.02 percent to 1388.77 points. The stock market was driven up by bank shares. This follows from the exchange's website. The Czech koruna is the strongest against the euro in the last 14 and a half years, it has also strengthened against the dollar.

The last time the PX index was higher than today at the end of the day was on February 23 last year. “The Prague Stock Exchange was able to build on Wednesday's strong growth and continued to strengthen,” said David Brzek, Fio bank's broker. Since the beginning of the year, the PX index has gained 15.6 percent, broker Wood & Company Vladimír Vávra.

Of the bank issues, Erste Bank rose by 1.79 percent to 873.40 crowns, Moneta Money Bank by 1.33 percent to 84.10 CZK. Securities of Komerční banka rose in price by 1.08 percent to 751.50 crowns. “HSBC confirmed the buy recommendation on Komerční banka. The target price was slightly lowered to CZK 1,020, but it still offers considerable potential,” said Brzek. Shares of insurance company VIG added 1.34 percent to 604 crowns.

The securities of the energy company ČEZ did not maintain the initial increase to 966 crowns and eventually strengthened by only a tenth of a percent to 955 CZK, Brzek pointed out. ČEZ announced today that it has formally started arbitration proceedings against the Russian gas company Gazprom. Due to the reduction of natural gas supplies last year, the Czech semi-state company is requesting damages of around one billion crowns.

“The shares of Colt also finished in a slight plus, adding 0.35 percent to CZK 581,” noted Vávra. According to Brzek, the securities of the tobacco company Philip Morris are reviving in recent days, today they added 0.70 percent to 17,200 crowns. “Investors' interest will be related to the traditionally high dividend, the announcement of which is slowly approaching,” noted broker Fio banka.

The euro is strengthening, benefiting from interest in riskier assets and the prospect of higher interest rates

The euro is strengthening slightly against the US dollar today, benefiting from the growth of investors' interest in riskier assets and the prospect of further interest rate hikes in the eurozone. The single European currency gained roughly 0.4 percent to $1.0755 shortly before 18:00 CET.

The European Central Bank (ECB) raised its key interest rate by half a percentage point to three percent last week, as expected. By tightening its monetary policy, the ECB is trying to get inflation under control.

The bank said last week that it intends to raise interest rates by another half a percentage point at its March meeting. “I would not rule out that another increase will come after the March increase. We have not yet won the fight against inflation,” ECB Vice President Luis de Guindos said in an interview with the Süddeutsche Zeitung newspaper on Wednesday.

The US central bank (Fed) increased last week the base interest rate by only a quarter of a percentage point to a range of 4.50 to 4.75 percent. It thus slowed down the pace of interest rate increases compared to the December session, at which it raised interest rates by half a percentage point.

Czech currency exchange rate:

Preliminary conclusion

Today around 17:00







Source: Patria Online