Friday May 20, 2022

Problems of the euro and withdraw the crown. The messenger, and the markets calmed down

The fate of the koruna is in the hands of the euro area – when the euro succeeds, the koruna will also strengthen. And conversely. Forecasts, which are secretly with the long-term strengthening of the koruna’s exchange rate, have widened in recent weeks. The ups and downs of the eurozone have made investors nervous and they are fighting from the koruna to certain currencies. If the euro condition bag improves, the crown will return strong time.

After the drama surrounding the Czech bankruptcy in the past two weeks, the markets are somewhat uncertain about cramps. The Czech Republic is more closely connected with the countries of the euro area, not to make the world more immune, because 65 percent of our exports make up to four countries paying in the euro. The negative touch on the euro is then applied to us.

“Central Europe is perceived by these investors as a risky non-eurozone country,” explains Ji Tyleek, of X-Trade Brokers. Do not distinguish whether according to public debt to GDP is 70 percent as in Hungary, or 35 percent as in the Czech Republic.

Over the weekend, the agreement between the Minister of Finance on the European Aid Fund had a beneficial effect on the euro’s exchange rate against the dollar and on stock markets. Investors are careful after panicking in the markets last week, not to be able to think with a cool head.

The two countries will take two decisive steps

In particular, the euro has only been able to return the door for a short time, but there are many questions to go over it. Is Greece a rough dispute of 30 billion euros? Will they give generln stvky? Has EU parliaments approved contributions to the new European protection fund?

“At first, they do not contain a concrete date for the reform of public finances of the euro area countries or the EU, assuming that the correction will be only in the short term,” notes Martin Kadlec from Saxo Bank. The investor’s doubts will be shaken by the euro and the koruna in the first few days.

In addition, it is clear that the first of all about the development of the sick budgets of European countries, Spain, Portugal, Italy and Ireland will come, there will be a decline. It turned into salary mn.

Dal from the factor of the development of the euro is decided by the European Central Bank to pour into the economy of the new pension. It is expected that the euro will weaken in the first year and two, similar to what happened in the same operations in the US and Britain.

The koruna’s exchange rate will fluctuate

While for the euro and therefore the koruna will be a development in the world markets, the growth of the Czech economy will only slightly support me. In connection with the fact that the NB will gradually appreciate in the last two years and slightly below 25 crowns per euro.

“Before the summer, the sending will not be big, it could be under 25 crowns, you need to prepare that the exchange rate will fluctuate about twenty halls up and down,” to Martin Lobotka, an analyst at esk spoitelny. According to the bank, the exchange rate is around 25 crowns per euro at the level that corresponds to the state of the Czech economy.

“Due to the gym, there should be a greater desire to take risks in the markets and a positive benefit from the domestic economy,” explains Stanislava Pravdov, an analyst at Danske Bank. In the meantime, new problems should not come to the surface in the euro area.

The impact of the May parliamentary elections may dampen the impact on the solar or lightweight kick. The current Minister is preparing a draft of the dispute with other controversial measures, which the investor lb.

It will depend on how the characters are elected to them. “Markets would, of course, welcome the balance between the right and the liberal, because it will be more likely that public finances will be put in the way,” Pravdov explains.

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