The Czech koruna yesterday showed its resistance to macroeconomic data. The koruna opened in negative territory at EUR/CZK 29.26 and dug further lower over the whole morning. Nevertheless, it shrugged off the significantly higher-than expected September’s deficit of current account. That came at CZK 9.4 bn, as above average dividend outflow ballooned the overall deficit. On the other hand high FDI at CZK 38 bn partly off-set negative impression. Later on, having touched 29.35, the koruna changed direction and recovered to the 29.28 zone. Positive mood in the region helped the koruna. Governor Tuma’s interview may have partly supported the koruna, as he confirmed that the bank expected rise in interest rates over one and half year. Finally, the unit plunged in American trading when it touched 29.52. Today the koruna opens at 29.35, stronger than in US Trading, but weaker than closed in Europe. There is no item on agenda, thus most important might be some squaring of positions ahead of the long weekend in the Czech Republic. Thus the koruna might slightly strengthen and move into the 29.30 zone.
(CSOB - Investment research)