The unit opened at 28.80 against the euro and didn’t dip more than to 28.86 over the session. The key driver was Polish zloty which was under weakening pressure due to political uncertainty and weak data. The lower than expected December PPI shortly boosted the koruna as it fell by 0.6 %. That makes a rate hike more and more difficult for the central bank. Later on, positive mood waned out since the November current account posted much higher deficit than expected. Another massive dividend outflow dragged whole C/A into deficit of CZK 12 bn, while the market expected only CZK 7 bn. However the koruna was little changed in the end to close at 28.83. Finally, vice-governor Singer in newspaper interview told, that the koruna didn’t firm too much. He added that the central bank now could either hike or cut interest rates. That’s another signal that the bank is rather far to decided to raise the rates again. data are on agenda, thus
development in Poland might be decisive.
(CSOB - Investment research)