It opened a touch above EUR/CZK 28.80, and
quickly plunged to as low as 28.89. The
market worried about possibility of Polish
early election and its effect on the region.
Nevertheless, the koruna ones again proved
strong resistance to any downward
pressure, as it quickly recover and in two
waves erased all morning’s losses. Finally, it
even moved further south in U.S. trading to
close at 28.77.
The only spur for the currency was another
signal that Hyundai will build its new factory
in the Czech republic. Although the car
maker didn’t make a final decision its almost
sure after recent talks that it makes deal with
the Czech government. The news drew
investors back into the currency and the
market found strong resistance at 28.89.
Today no indicator is on agenda, but
development in Poland may not left traders
unnerved. Hyundai investment may improve
sentiments again, as it should raise trade
balance surplus in future. All in all, the
koruna may remain strong, but may not
climb much further.
Czech koruna initially plunge but later
recover on Hyundai news
(CSOB - Investment research)