It slowly strengthened from Thursday’s level of EUR/CZK 30.55 to 30.475. The key incentive was the EUR/USD which rose ahead of the crucial referendum in France. However, strong “NO” result of the referendum sends the euro and the koruna lower, back to the levels where they opened on Friday. Nevertheless, it seems that the reaction to the referendum might be pretty calm, as French “NO” wasn’t any surprise for the markets.
Today the market has t o digest the referendum, no other event is scheduled. However, it’s obvious that we will not see any panic. A holiday in New York and London might back quiet market. Thus the market might be more or less flat today. We put the risk for some weakness of the euro and the koruna tomorrow, when London traders will come back after their long weekend. We assess the “NO” vote, as negative for the koruna from the long-term point of view, hence negative market atmosphere might prevail.
(CSOB - Investment research)