Czech Koruna Erases Gains as Fitch Cuts Outlook to ‘Stable’
The koruna erased gains after Fitch Ratings cut the Czech Republic’s outlook to “stable” from “positive.”
The Czech currency weakened less than 0.1 percent to 25.661 per euro at 5:08 p.m. in Prague after earlier strengthening as much as 0.5 percent. The PX index (PX) of stocks closed 0.2 percent higher at 862.2 before the Fitch statement.
Fitch, which reaffirmed the country’s A+ assessment, said the outlook revision reflected the deterioration of the growth outlook in the euro area, the Czech Republic’s main trading partner.
Czech gross domestic product growth “has already slowed to a virtual standstill,” Michele Napolitano, a Fitch director, said in a statement. “The 2012 deficit is likely to slightly overshoot the government’s forecast, given an optimistic growth assumption.”
The koruna strengthened earlier today after a Czech central banker said further interest rate cuts wouldn’t help the economy and a report showed that investor confidence in Germany improved.
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