The market is pretty optimistic toward the koruna, partly due to the Hyundai investment. The deal between the company and the government is finalizing these days. Nevertheless, we doubt that the investment might have other than psychological positive impact on the market in a short-term. However, traders likely won’t square its positions in the koruna before the deal will be endorse.
EUR/CZK at new life low .
Regarding trading, the EUR/CZK opened just above 28.70 and reached its new low even before the noon. In the afternoon, it slightly retreated, but the unit found ground quickly to close near its all-time lows.
This week the domestic calendar has only one significant item – a policy meeting of the CNB on Thursday. The recent profound strengthening of the koruna may lure attention of the bankers to the FX market. However by Thursday the market may lack any incentive. Given improving political climate in Poland, the koruna may prolong its upward mission today.
(CSOB - Investment research)