CNB Dovish Stance Could Weaken CZK Against Euro

Expectations for Thursday's Czech National Bank (CNB) meeting are centered on whether the central bank will soften its stance, potentially weakening the Czech Koruna against the Euro.

According to ING strategist Frantisek Taborsky, markets are pricing in a hawkish tone from the CNB, but he expects the opposite, dovish guidance that would reduce rate hike expectations.

The key event for this week is indeed the CNB meeting, and while the market still has a more hawkish outlook than ING's economists, any signs of a dovish tone could help reduce rate hike expectations and further boost the Euro against the Czech Koruna.

ING sees EUR/CZK approaching 24.300 around the meeting and potentially rising further if the CNB confirms its dovish stance and the US Dollar strengthens.