Pope’s death curbs activity in the whole region, but mainly in Poland, which is the most important mover of CE currencies. The unit hovered in the tight range of EUR/CZK 29.88-30.00. Initially the koruna got some lift from temporary weak dollar, but the currency waned out all gains quickly. There was no significant impetus for the market yesterday. A drop of constructions activity in February due to really unfavorable weather conditions is not an impetus for the market. Nevertheless, government row moved yesterday. Prime Minister Gross offered his resignation for the first time yesterday. His new plan suggest old coalition with government without party leaders. This plan could succeed, but negotiations have not started yet. Today, despite PM Gross’ plan we do not expect change in the dormant mood on the markets. Furthermore, tame inflation hardly move the market. Thus, the koruna might hover on the stronger side of the 30.00 level again.
(CSOB - Investment research)