Friday May 20, 2022

The crown weakens, Christmas does not affect the night

The strengthening Czech crown, which they have already imposed in previous months, is over. The domestic weakened last week the most since the August arrest to the two major world currencies, the euro and the US dollar.

While the koruna broke two-year records at the end of November, it is now moving at several lows with a high probability of a further decline. Prices of imported goods should not change until Christmas.

The esk mna reached 24.79 crowns per euro during the morning, when it lost 0.6 percent since the arrest of the month. The weakening trend is more noticeable against the US dollar, which could be bought for 18.75 crowns. In addition to the longest world, the Czech koruna lost almost six percent in November. Poor performance for me, however, applies to the entire region and in comparison with the Polish zloty and the Hungarian forint, the rising crown is the best.


Click to enlarge the graph.

European debt crisis again in the lead role

The fate of the koruna is currently in the hands of the European debt crisis. Although the Czech Republic is not a member of the euro area and does not have to pay payments to protect their flax, its problems are largely related to the Czech Republic. 65 percent of exports go to the euro area, and if the demand from these countries decreased due to economic problems, Czech companies would start to have problems.

The negatives affecting the countries paying in euros are then applied to us. Traders in the currency markets have been aware of this for a long time. The member thus weakens the koruna, despite the debt crisis on the domestic scn not on the agenda.

Traders with the Czech crown thus perceive the gradual increase in the Czech Republic’s loan on the financial markets. Due to the uncertainty in the bond markets caused by the problems of the European periphery, investors demand years in the Czech Republic. The current problems of Ireland will thus directly affect the country and in the end may cost several billion crowns. Due to a variety of factors, it is important to determine the end, but the crown will certainly count it in the future.

Consequences of the koruna’s decline

The weak koruna increases the number of products and services from abroad, although the price increases gradually and is usually spread over several cities. It should not happen until Christmas due to the weakening of me, and at the end of next year, its consequences could be dampened by newborn sales.

The declining koruna is usually first and foremost reflected in goods from Asia, for which wholesalers pay in US dollars. These are mainly electronics and textile products. The weakening of the bag thus affects the import prices of cars. However, in the winter months in this segment there is usually no health and a weak crown would be reflected in the spring.

The weakening koruna has a negative effect on imported raw materials such as oil and natural gas. A substantial part of the family budget is your holiday abroad, which could gradually become more expensive due to weak crowns. One of the few groups that can rejoice in the current situation are the exporters. Compared to the previous two years, the Czech crown is still only a few halls away from its strongest values.

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