It hovered around EUR/CZK 30.20, little changed to previous day. Latter on, the koruna gave up some ground again, as the US dollar climbed to fresh 7-month highs against the euro. Hence the unit touched 30.33 and closed in the 30.30 zone.
The market completely ignored Robert Holman, member of central bank’s board, who warned that early adoption of the euro represents significant risks for the Czech economy. He favours the Czech republic will joint eurozone later than in expected 2010. nevertheless, we should add that the euro adoption is primary government responsibility and Prime Minister Paroubek wants the euro in 2009-10 as set earlier in the convergence program. Holman just repeated the opinion of group of economists around president Klaus.
Today no event is scheduled hence the EUR/USD volatility may drive the koruna. Rising weakness of the euro ahead the referendum in France and the Nederland opens room for the koruna to weaken further.
(CSOB - Investment research)