The Czech koruna started at the EUR/CZK 28.37 level yesterday morning. But after the
excellent IFO the currency started to gain. The Czech currency also took and advantage of optimistic economic outlook confirmed by quarterly forecast of the Czech Ministry of Finance published yesterday. The Ministry increased the GDP forecast for this year by 1 percentage points to 5.6% and it left the inflation forecast unchanged at 2.6%. In the afternoon, after the U.S. figures, the small correction occurred so the koruna closed little changed from the opening level.
Today, the domestic calendar is empty and the koruna will again closely watch the core markets. The positive EMU industrial orders should support the currency and the koruna can slightly gain today. But no large changes of the exchange rate is expected before Thursday’s meeting of the Czech National Bank Board which will have a new inflation quarterly forecast on the agenda.
(CSOB - Investment research)