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Economists at Rabobank analyze the EUR/CZK outlook after the Czech National Bank cut its policy rate by 50bps to 1.75% at an emergency meeting on March 16. EUR/CZK trades at 27.372.

Key quotes

“In the very near term EUR/CZK may consolidate its gains around the psychological level of 27.00 (a corrective pullback cannot be excluded given the parabolic price action over the last few weeks).”

“Unless within next few weeks there is sufficient evidence that the virus is being contained across Europe and on other continents with focus on North, Central and South America, we expect EUR/CZK to resume its upside trend.”

“A cautiously optimistic scenario assumes that EUR/CZK will peak around the 2015 high at 28.517 over the 1-3 month horizon.”