The above mentioned reasons helped the Czech currency to firm against the
single currency from 30.400 in the morning as far as at 30.140, the koruna
closed at 30.325. The market is still nervous and is watching carefully the
CNB steps. Versus the dollar the koruna weakened thanks to euro's fall below
the parity versus the dollar. The koruna weakened by 8 hallers to 30.440
from 30.360. Jitteriness before the CNB Bank Board meeting will keep the
koruna above 30-korunas level even if the CNB doesn't enter the market
The CNB meeting is expected to cut rates by 50 bps and to express its
opinion on exchange rate. We anticipate, that the EUR/CZK should stay in the
30.100 - 30.500 range and the USD/CZK should move from 30.150 to 30.900.
This morning the EUR/CZK opened at 30.260 and the USD/CZK at 30.550.
The prime minister Vladimir Spidla said to Reuters agency yesterday, that
the government discussed the koruna's exchange rate with the central bank.
The discussion will last likely to the end of August.
The foreign trade gap in June narrowed to CZK 3.2 bn, cumulative deficit for
this year reached CZK 23.9 bn.
The Ministry of finance lowered its forecast of GDP for 2002 to 3.0% from
3.4% y/y and average inflation from 3.3% to 2.0% y/y. It let unchanged the
GDP forecast for 2003 (+3.6% y/y), however the inflation forecast will
lowered from 3.4% to 2.0% y/y.
open max min cls open 24/7
EUR/CZK 30,400 30,410 30,140 30,235 30,260
USD/CZK 30,360 30,770 30,340 30,440 30,550
Stepanka Kuzilkova, Investment Research, CSOB