The Czech koruna failed to break through the EUR/CZK 28.90 level yesterday, therefore it returned above the technical level 29.00 in the afternoon. Initially, it climbed as high as 28.92, what is the new 3-year high. Nevertheless, the positive sentiment wasn’t strong enough to push the koruna further. Moreover, regional currencies meanwhile moved into negative territory, thus the koruna followed suit and tumbled to its daily low 29.04. In the rest of the day it partly recover hovering around 29.00. Only the fact that the Finance Ministry released its borrowing strategy for 2006 might have affect the market. The Ministry plans another EUR 1 bn bond in the next year. Nevertheless, that’s not surprising. Today the koruna opened again above 29.00. The Q3 wage rise may not influence the market. Traders might be cautious ahead tomorrow’s ECB meeting. Thus the koruna may hover around 29.00 today.
(CSOB - Investment research)