The Czech koruna slowly retreated
yesterday, as drop of the zloty was a trigger
for sell-off in the whole region. Nevertheless,
the reaction of the koruna was pretty calm,
as it was weakest at EUR/CZK 28.84 over
the day, while it opened at 28.79. Moreover,
the koruna got boost in the last hour of the
session and returned back to the 28.80
zone. That shows the koruna is still pretty
immune to the weakness of any CE
currency. The market shrugged off the
figures on retail sales, which came more or
less in line with market expectation. Further
more, prospect for widening of the negative
interest rate differential over the euro didn’t
discourage traders as well.
The domestic calendar is empty until next
Thursday, when the central bank holds the
meeting. Therefore traders may look to
Poland, where talks over the budget
continues. Given political uncertainty in
northern neighbor hamper chance for any
upward movement, thus the koruna may
lose ground in step with the region.
(CSOB - Investment research)