CZK: Koruna Outperforms as CNB Says Tight MonPol Required

The koruna is outperforming its regional peers, up 0.3% against the euro at typing. EURCZK made a brief test of resistance at the 50-DMA earlier in the session – an average spot has not closed above since April – but the subsequent move lower means the cross has now pared the bulk of the week’s earlier advance. Key support is at 24.177, September’s 2-year low.

• Czechia's September CPI inflation was confirmed at +2.3% Y/Y in the final reading published this morning. Market reaction was limited but it came on the back of a below-forecast flash reading. From the central bank's perspective, the structure of the data remains worrying, as much of the downside surprise resulted from more benign food prices, which are notoriously volatile.
• Commenting on the data, the central bank said, “The evolution of core inflation shows that overall price developments in the domestic economy have not yet fully stabilised and require tight monetary conditions.”