Czech crown ticks up as growth seen staying strong

13.03.2007 | , Reuters
Zpravodajství ČTK


perex-img Zdroj: Finance.cz

PRAGUE, March 13 (Reuters) - The Czech crown inched higher within a narrow range against the euro on Tuesday, after a stronger-than-expected...

...rise in January industrial output showed the economy sustained a robust pace of expansion into 2007.

The crown gained 0.1 percent to trade at 28.195 per euro by 1505 GMT. It has held a trading range around 28.150 for about a week.

Double-digit increases in cars and electronics production propelled growth in industrial output to 9.8 percent year-on-year in January, helping it regain momentum after a slowdown to 3 percent in the previous month [ID:nL13408467].

"Today's data should be crown positive, especially as rising wages point to accelerating inflationary pressure and CNB (central bank) rate hikes later this year," analysts at BNP Paribas said in a report to investors.

Low official interest rates, at 2.50 percent the lowest in the European Union and a record 125 basis points below euro zone equivalents, have weighed on the crown in the past months, turning it into a funding currency for regional investments.

On Wednesday, investors will scan January current account numbers for indications of the external balance trend after the rolling 12-month c/a deficit doubled to 4.2 percent of gross domestic product (GDP) over the last year.

February producer price (PPI) data, also due out on Wednesday, will be watched for clues about the strength of underlying inflationary pressures in the economy which expanded by 6.1 percent annually in both of the last two years.

In the debt market, the finance ministry will offer a 7 billion crown ($326.9 million) tranche re-opening the 30-year government bond .

Some Prague traders said demand from domestic investors might fall short of the offered amount and the auction could end up undersubscribed unless foreign investors take part.

The 30-year yield traded just 22 basis points above the euro zone benchmark on Tuesday, reflecting the low level of Czech market interest rates which have hovered below their euro zone counterparts on maturities of up to 10 years.

----------------- MARKET SNAPSHOT AT 1505 GMT ----------------- Crown/euro last deals at 28.195 (0.11 pct) Crown/dollar at 21.353 bid (0.19 pct)

5-year yield due Oct 2010 3.33 pct bid 10-year yield due Jan 2016 3.75 pct bid

5-yr CZK/EUR mid yield spread -59 bps 10-yr CZK/EUR mid yield spread -15 bps

Current levels versus prior domestic close at 1500 GMT ---------------------------------------------------------------

Autor článku

 

Články ze sekce: Zpravodajství ČTK