The Czech koruna continued climbing higher on Friday. The unit opened at EUR/CZK 30.00 and rose almost permanently over the session to close at 29.90. There was no particular domestic event behind the price action, the currency mostly tracked Polish zloty. Having fell to 30.60 after a surprising rate cut on April 28, the koruna is sensitive to any positive incentive now. The currency made impressive gains last week, when almost every day rose and it was stronger by 2 % over the whole week.
Today the April inflation may lure attention of the market. Consumer prices rose only 0.1 % in April due to higher gasoline prices. Year-on-year inflation rose only slightly to 1.6 %. Nevertheless, advantageous comparative base might push inflation to 1 % in summer. For the price action might be, however, more crucial a development in Poland and Friday’s rise of the US dollar. Since there is positive atmosphere on the Polish market, the koruna may continue to rise.
(CSOB - Investment research)