The Czech koruna halted a three-day advance as worse-than-expected data for foreign trade spurred concern the country’s recession will drag on, prompting the central bank to help exporters by weakening the currency.
The koruna depreciated as much as 0.3 percent today, after gaining 0.3 percent in the previous three days. It later recouped losses and traded little changed at 25.196 per euro by 4:12 p.m. in Prague, after better-than-forecast U.S. jobs data.
The Czech trade surplus rose to 33 billion koruna ($1.7 billion) in October from 30.8 billion koruna a month earlier, the Czech statistics office said today, missing the 38 billion- koruna median estimate of 16 analysts surveyed by Bloomberg. More monetary easing may be needed in 2013 and the exchange rate would be the next tool, Czech National Bank Governor Miroslav Singer said on Nov. 15.
“The Czech economy operates well below its potential and the development is thus generating disinflationary pressure in the domestic economy,” Radomir Jac, chief analyst at Generali PPF Asset Management AS, wrote in a report today. “The central bank is ready to push the koruna weaker, if further easing of monetary conditions in the Czech economy is needed.”
Gross domestic product contracted 0.3 percent in July to September, a third straight quarterly drop, the statistics office said today. That matched its estimate released on Nov. 15. Exports adjusted for the number of working days shrank 2.4 percent from a year earlier, it said.
The CNB cut its benchmark interest rate to 0.05 percent on Nov. 1, the second-lowest in the European Union after Denmark.
The five-year koruna yield increased one basis point, or 0.01 percentage point, to 0.77 percent. The rate reached a record-low 0.70 percent four weeks ago, according to generic indexes compiled by Bloomberg.
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