The Czech koruna opened yesterday at 29,735 EUR/CZK. There were no important domestic events scheduled for Tuesday. Therefore the koruna, thanks to forint’s gains, started to improve its position at the beginning of yesterday’s session. After volatile trading later during the day it closed slightly strengthened at 29.640 EUR/CZK.
Today the regional sentiment will once again play a crucial role for the koruna. Although the domestic economy looks fundamentally very healthy, the koruna might miss enough positive regional news to break through the key technical barrier at 29.55 EUR/CZK. Weak US dollar can play in favor of CEE. On the other hand rising yields in the US and other core markets threaten to diminish the yield advantage of the whole region.
(CSOB - Investment research)