EUR/CZK clocked up a sizable decline last week moving to a fresh covid-era low of 25.18. Subsequently, Economists at Credit Suisse lower their EUR/CZK target to 24.80 following the sizable boost to carry.

CZK-carry has become extremely attractive after last week’s 125bps policy rate hike

“We lower our EUR/CZK target to 24.80 from a previous medium-term projection of 25.20.”

“A sizable boost to carry, following last week’s 125bps policy rate hike, and the central bank’s implicit green light for further koruna appreciation suggest further downside for EUR/CZK.”