In a significant financial milestone, the Czech crown has broken through the 21 CZK/USD threshold for the first time in four years. Tuesday’s trading saw the crown strengthen by 13 hellers against the dollar, closing at 20.93 CZK/USD. The national currency also gained ground against the euro, appreciating by five hellers to trade at 24.67 CZK/EUR by 5:00 PM according to Patria Online, marking its strongest position against the euro in a year.
According to Jan Vejmělek, an analyst at Komerční banka, “The dollar is suffering primarily due to political instability in the US and pressure from President Donald Trump on Federal Reserve Chairman Jerome Powell.” This international economic context has created favorable conditions for the Czech currency.
A strong euro translates to a strong crown, Vejmělek explains. The domestic currency received an additional boost from the morning’s release of the Purchasing Managers’ Index (PMI). S&P Global reported that conditions in Czech manufacturing improved in June, representing the sector’s first health improvement since May 2022. The PMI rose to 50.2 points from May’s 48 points, significantly exceeding market expectations. A level of 50 points in the index marks the dividing line between sector growth and decline.
Purple Trading analyst Jaroslav Tupý had already noted on Monday that the crown is benefiting not only from a weak dollar but also from the Czech National Bank’s hawkish approach to monetary policy. “This week is relatively weak for economic macrodata; the preliminary inflation estimate for June 2025, due on Friday, will be crucial for the crown’s further development,” he added.
The strengthening Czech crown comes at a time when many currencies are facing volatility amid global economic uncertainties, making this performance particularly noteworthy for investors and economic observers alike.