CZK: Little Pressure For Appreciation

Further koruna weakness is likely in the short term, with risk aversion in Europe set to remain prevalent. Strong support at CZK26.00/EUR will be key to watch, with another serious fiscal blow up in the eurozone likely to be required to push the unit through this level. Regardless, the koruna is well supported at CZK26.40/EUR and CZK26.70/EUR, which should prevent a rapid sell-off. On the upside, we would view a push through resistance at CZK25.00/EUR as highly unlikely, given the Czech National Bank's talking down of the currency when it has approached this level on previous occasions.

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