In recent days, the dollar traded on the interbank market for about 21.30 crowns, which represents a significant strengthening over the past twelve months. “The koruna’s exchange rate against the dollar was at similar levels in May 2018,” says Lukáš Kovanda, chief economist at Trinity Bank.
However, the strong koruna dampens the transmission of commodity prices to the final prices of, for example, fuels. In early November, a barrel of Brent oil sold for less than $ 40, but now costs about $ 51. Fuel prices at Czech petrol stations responded by growing by tens of pennies.
“Fuel prices are based on the market in Rotterdam, where dollars are traded. If the koruna had not strengthened, the price would have been higher, “points out Ivan Indráček, Chairman of the Board of Directors of SČS – Union of Independent Petroleum Drivers of the Czech Republic.
But it is not just the price of oil that is rising. Prices of iron ore, silver, soybeans or gold are also rising sharply. Commodities are already according to the indicator The Bloomberg Commodity Spot Index most expensive since mid-2014.
Their prices are being driven up by hopes for a revival of the world economy associated with the vaccine, support from the world‘s central banks led by the Fed, but also strong demand from China and unfavorable weather, making agricultural production more expensive. “The price of corn is the highest since 2014,” adds the company’s analyst Finlord.cz Boris Tomčiak. At the same time, after the brutal spring slump, oil and gas prices have recovered and electricity is also rising.
In addition, price growth may continue. American Bank House Goldman Sachs namely, at the end of the year, he stated that the current profits are only the beginning of a “much longer growth market”.