It opened at 29.195 CZK/EUR. Despite better than expected current account deficit, koruna slightly weakened in the morning up to 29.230 CZK/EUR. There were no other significant events on domestic agenda and thus the trading has been influenced by the mood of selling in other Central European countries. In the afternoon koruna recovered to close unchanged.
July’s current account eventually showed a deficit of only CZK 10.5 bn while the market was afraid that, because of the very high deficit in June, it could be as high as CZK 14 bn. Nevertheless, the balance of income deficit was only CZK 12.9 bn in the end, as opposed to CZK 26.4 bn in June. Thus the peak of dividend payments to foreign countries is hopefully over.
Today the calendar is empty and therefore the koruna might be influenced by the sentiment towards the whole region. According to last published indicators Czech economy is currently in very good condition and that can play in favor of the koruna in the midterm. During the week we expect the koruna to stay in the CZK/EUR 29.100 – 29.300 range.
(CSOB - Investment research)