Markets gear up for end of Czech koruna cap

With inflation at its highest level since 2012, the CNB's change of language leads analysts to herald end of EUR/CZK floor

inflation-risk2
Going, going, gone: “In light of [last week]’s meeting, we expect the FX floor to be scrapped within the next six weeks” – Viktor Zeisel

The Czech National Bank (CNB) could pull its EUR/CZK floor and allow the koruna to trade below 27 as soon as this week, following strong inflation data and a change of language from the bank, which led analysts to believe the days of a cap on the Czech currency’s strength are numbered.

The CNB installed the minimum exchange rate in the euro’s value against the koruna in late 2013, after appreciation pressures in the currency put a dampener on inflation. But the latest figures for February

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