The Czech koruna fell against the euro as the traders expect the government to weaken the currency to protect the nation’s exports and prevent the deflation. Against the greenback the koruna fluctuates between gains and losses after its slumped and then returned to the opening level earlier.
The central bank’s policy makers expected to keep interest rates at the current on today’s meeting, which can be very dovish as the strong currency threatens the nation’s recovery. The nation’s economic recovery depends heavily on the exports, which account for 70 percent of the economy and may be hurt by the currency’s gains.
USD/CZK traded at 18.745 as of 12:06 GMT after opening at 18.686 and climbing as high as 18.831. EUR/CZK rose from 24.641 to 24.7100.
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