Czech National Bank to intervene finally to push EUR/CZK up

EUR/CZK moved aggressively towards its 27.00 floor, over the past week, and warned that CNB may soon have to intervene to defend the floor.

In a significant development yesterday, CNB confirmed to the media that it had to, indeed, intervene to push up EUR/CZK away from its floor last Friday, the first direct intervention since November 2013 when the floor was first established. 

CNB will not provide details of intervention amount that it used, but FX reserve data might give clue of the same in a few weeks' time. 

"Meanwhile, more volatility and 'events' are expected to be seen near the official floor as speculators are likely to take interest in any story where an FX floor was temporarily breached, requiring the CenBank to defend it", says Commerzbank.