The unit opened slightly above the level EUR/CZK 29.00, but it was moving south from the start of the session. It shows strong positive sentiment toward the koruna these days. The koruna flourished although other CE currencies was slightly lower yesterday. The koruna of course shrugged off the higher Q3 rise in nominal wages, but attacked its all time high on the news that S&P changed outlook for the rating of the Czech Republic from neutral to positive. Thus the koruna rose to new 3-year high 28.875, but it failed to brok through all time high at 28.85. In the afternoon, the unit retreated to the low nineties.
Today all eyes might be at ECB’ meeting, as the bank should raise interest rates in eurozone after 2 and quarter year keeping them at historic low. Higher eurozone rates are slightly negative for the koruna, but it is broadly expected, therefore it may not affect the market. The November result of the central government budget has usually low importance.
(CSOB - Investment research)