PRAGUE: The Czech crown dipped by 0.1 percent to 26.180 to the euro on Wednesday, giving up more ground after a central bank rate hike last week and touching the weakest levels since June 30.
The currency firmed to 25.900 after the bank raised its main rate by 20 basis points to 0.25 percent last Thursday but gave the gains back after the bank said inflation pressures were peaking and it may take time before it tightens policy again.
"This is the same trend of the past days, it is visible the crown is overbought," a trader at a Prague bank said.
"After the hike... there was some first profit taking. We are now nearing levels around 26.200 and if we move behind those, the closing of short-euro positions may pick up speed," he said.
The crown's path will be key to the future interest rate hikes.
The bank's board said last week that it saw a risk of currency weakness, relative to the baseline bank staff forecasts, due to closing of long-crown positions built up in anticipation the crown would firm after the bank dropped a 27.0 per euro cap on the exchange rate in April.
Comments
Comments are closed for this article.