The Czech Koruna has been trading at weaker-than-expected levels in recent weeks, but economists at ING still believe EUR/CZK should go lower.
The CZK should benefit most from a rebound in EUR/USD
On a global level, the CZK should benefit most from a rebound in EUR/USD, while the CNB will try to postpone dovish market pricing, which should support interest rate differentials. On top of that, market positioning is rather light compared to PLN and HUF and carry is still decent.
We expect the Koruna to move below 23.70 EUR/CZK in the coming days.