The dollar continued to depreciate to two-month lows against the euro and the Swiss franc yesterday, knocked down by speculations that the U.S. Federal Reserve is nearing the end of interest rate hike cycle. Nevertheless, the market broadly expects the Fed will raise rates for a 14th consecutive meeting at the end of this month, putting the key funds rate to 4.50%. Additional increases beyond that are however well in doubt.
Favourable sentiment in the whole central European region boosted the crown against the euro on Wednesday. This morning the currency ignored a report showing the foreign trade balance posted a lower-than-expected surplus of 1.75 billion crowns in November. The market had forecast a 3.25 billion surplus following a 1.82 billion surplus in October.