The Czech koruna initially tried to climb higher yesterday, but the effort failed quickly. Return of London players to the market sent the unit lower to the EUR/CZK 29.70 zone. The Finance Ministry explicit comment that the Czech Republic will adopt the euro in 2010 might have support the negative atmosphere. Yet the market assessed 2010 as the most likely option even before. Moreover adoption and entrance date will mostly depend on the policy of the next government. Thus the koruna decouple from the forint and the zloty, which moved to positive territory.
Today the koruna may digest yesterday negative price action and at least partly recover, as breaking of the level 29.80 is not likely.
(CSOB - Investment research report)