The Czech koruna opened at 29.350. It started to loose from early morning in accordance with the development in the whole region. The declining sentiment for the Central Europe can be explained by growing support of Law and Justice (PiS) in relation to currently winning Civic Platform (PO) in ahead of Polish elections. The koruna broke through the barrier 29.4 EUR/CZK. Though it afterwards regained it’s position, finally it started to go down in the afternoon and closed at 29.431. There is no fundamental explanation for the weakening of the koruna. Beside the development in Poland and Hungary it might have been influenced by political situation in Slovakia and domestic coalition hassling as well. With the absence of significant domestic economic events, the optimism towards the whole region should be crucial. Any negative political news can weaken the koruna. On the other side the koruna is strengthening in mid term horizon and thus it we believe it should not go below 29,65 EUR/CZK.
(CSOB - Investment research)