EUR/CZK likely to remain stable at current level in 2017, pair to reach 25.5 by end-2018 – Erste Group

The EUR/CZK pair is expected to remain stable at around the current level of 26.0-26.1 for the remainder of the year, noted Erste Group Research in a research report. Even if the exchange rate should tend to appreciate, mostly because of the positive development of the Czech economy and the expected CNB hike, these tendencies would be followed by some foreign investors who would be selling korunas, therefore suggestive relative stability of the EUR/CZK pair, stated Erste Group. The risk for the currency pair is to be considerably skewed to the depreciation side, because of the overboughtness of the koruna.

The overboughtness of the koruna would still be weakening the appreciation movements of the EUR/CZK in the next two years. The current pair is expected to reach 25.5 by the end of next year and 24.9 by the end of 2019, added Erste Group. However, the current development of the economy would suggest a higher rate of appreciation.

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