Today we saw the CNB hike the Repo Rate higher than all the economists predicted. They hiked the rates by 0.75 basis points, the highest rate hike since 1997. Giving us a great sell opportunity on USDCZK with a nice staggered move down 140 pips over the next 90 seconds. An excellent trade!
In the Czech Republic, the benchmark interest rate is set by the Czech National Bank (CNB). The official interest rate is the two-week repo rate, a rate at which commercial banks are allowed to place excess funds at the end of the day with the Central Bank.Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation. A higher than expected rate is positive/bullish for the CZK while a lower than expected rate is negative/bearish.