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Deflationary Pressure Makes Czech Koruna Weaker

January 7, 2015 at 15:18 by Vladimir Vyun

Mixed Czech koruna billsThe Czech koruna sank today due to concerns that deflationary pressure may lead to additional monetary easing from the nation’s central bank. The currency fell more than 1 percent against the US dollar.

Vladimir Tomsik, Vice Governor of the Czech National Bank, talked about “strong deflationary pressures”, which “may have a negative impact on domestic real demand”. It looks like economic problems of the eurozone spilled over to other countries of the European Union. As a result, it looks possible that the cap on the koruna will stay in place past 2016.

USD/CZK climbed from 23.2500 to 23.4879 as of 15:18 GMT today.

If you have any questions, comments or opinions regarding the Czech Koruna, feel free to post them using the commentary form below.

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